Rs 114-bn PNB fraud: People, not processes, responsible, say bankers

Bankers say it is the nature of the business of public sector banks that makes them susceptible to fraud

The alleged fraud at Punjab National Bank (PNB) has raised questions over the processes and systems in public sector banks (PSBs), but bankers say there are a number of reasons why it’s always the PSBs that seem to be affected, whereas private and foreign banks seem to be the most efficient.

To start with, the sheer size of the market the PSBs control makes them vulnerable to determined frauds. About 70 per cent of the banking system is controlled by PSBs, and by extension of that, most of the frauds get optically tilted towards these banks, say bankers.

These banks