Jaitley criticised regulators for failing to detec PNB fraud

Arun Jaitley

Arun Jaitley

Jaitley in a veiled reference to the scam involving the diamantaire Nirav Modi, said on Saturday that the discourse needed to move on from ease of doing business to that of Indian industry's responsibility to become ethical in the way it does business. "Regulators have a very important function, regulators ultimately decide the rules of the game and they have to have a third eye which perpetually be open". He also slammed the lack of ethics among companies and the lackadaisical attitude of bank managements as well as supervisory bodies including auditors and regulators, which provided a fertile ground for fraudsters to thrive.

Speaking at the 4th Global Business Summit Finance Minister Arun Jaitley took a dig at banking regulators saying that only politicians are blamed and face flak when large-scale scams happen but no one talks about regulators.

However, the capital gains made on shares until January 31, 2018, will be "grandfathered", FM Jaitley said while presenting the budget, adding "we have protected all investments coming in before February 1".

"Rather than always have a close look at what government's are doing, Indian industry needs to look inwards and to a fair bit of introspecting", Jaitley said.

Responding to the PNB fraud, the finance minister Arun Jaitley today called for an end to "unethical behavior" between lender-borrower relations.

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"At least if elections are held every five years, India will see comfortable governance and policy formulation besides lesser expenditure", he said.

"From both governance and expenditure point of view to have 2-3 elections every year is a serious challenge". "This (privatisation) involves a large political consensus". My impression is that Indian political opinion may not find favour with this idea itself.

Industry chamber Assocham said last week that the PNB scam should act as a "strong trigger" for the government to surrender its majority control of banks which should then be allowed to work on the lines of private sector lenders with a full sense of accountability to their shareholders and protecting interest of depositors.

With increase in instances of willful defaulters gaming the banking system, Jaitley said the non-performing assets were a result of both business failure and diversion of funds by companies.

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