Rs 114-bn PNB scam: Govt seeks RBI's view on lapses in banking system

In its letter, finance ministry has pointed to sections 35, 35A and 36 of the Banking Regulation Act, 1949, to highlight the powers and functions of the RBI as regulator

The Union government has shot off a letter to the Reserve Bank of India (RBI) on the alleged Rs 114-billion Punjab National Bank (PNB) scam, asking whether at any stage the banking regulator had detected the fraud, involving letters of undertaking (LoUs) issued to foreign branches of Indian banks on behalf of companies promoted by Nirav Modi and Mehul Choksi.

“Under the Banking Regulation Act, the RBI has a major role related to inspection, regulation, audit and the oversight of banks. We have written to the RBI, asking how the alleged scam, which had been going on for years, went