Banks' risk management under a cloud after Rs 114-bn PNB fraud case

The latest fraud is a failure of management supervision and accountability, say experts

The fraud perpetrated against Punjab National Bank (PNB) raises grave concerns about the banking sector’s risk management system and fraud detection ability, and shows that despite all the checks and balances in place, a scam can take place bypassing the whole system.
 
Lenders, particularly public sector banks (PSBs), recently came under criticism by the Reserve Bank of India (RBI) for “lack of effective risk management practices”. RBI Deputy Governor N S Vishwanathan blamed banks for the bad debt mess and said if they had been practitioners of good risk management, the non-performing assets (NPA) stock would have been far