Page 6 - Banking Finance December 2019

BANK UPDATE

NBFCs receive extended Karnataka launches A/C mobilisation campaign
support of Rs. 2.56L cr Karnataka Bank has recently launched a current account, savings account (CASA)
campaign. The bank said it intends to mobilise more
from PSBs than 4.18 lakh CASA accounts by the active involve-

In accordance with the finance min- ment of its 8,000-plus workforce across its 846
istry, public branches in India.
sector banks Mahabaleshwara MS, Managing Director and Chief
(PSBs) have Executive Officer, said the bank will be able to onboard a good number of pro-
extended spective clients during the three-month-long intensive CASA campaign.
support of Rs
2.56 lakh EOW nabs 2 PMC Bank auditors for negligence
crore to NBFCs by way of credit and
Statutory auditors of Punjab and Maharashtra Cooperative (PMC) bank, Ketan
pooled buyout since September 2018
Lakdawala (60) and Jayesh Sanghani (61), arrested
as part of efforts to provide much-
for their role in the Rs 6,500 crore loan fraud case,
needed liquidity to the sector.
were produced before Esplanade court and re-
Further, under the partial guarantee manded to police custody till November 15.
scheme, PSBs have been accorded Lakdawala and Sanghani were summoned for ques-
sanction to purchase Rs 21,580 crore tioning and later arrested. An officer from city eco-
worth of pooled assets as on Octo- nomic offences wing (EOW) said the two were arrested for negligence and flout-
ber 16, the ministry said in a status ing certain rules in the audit process.
report of various stimulus measures
The number of arrests in the case has gone up to seven. EOW had arrested
announced since August 23 to boost
sagging economic growth which hit HDIL father-son directors Rakesh and Sarang Wadhawan, and the bank’s ex-
a six-year low of 5% during the first chairman, Waryam Singh and bank’s ex-MD Joy Thomas among others.
quarter of the current fiscal.
Anurag Thakur says regulator, auditor should be held
In order to address the stress in the
sector, Finance Minister Nirmala accountable for bank frauds
Sitharaman in the Budget proposed Minister of State for Finance Anurag Thakur said that the regulator, auditor
that public sector banks would pur- and management should be held responsible for fraud
chase high-rated pooled assets of fi- in Punjab and Maharashtra Co-operative Bank or
nancially sound NBFCs, amounting to other banks.
a total of Rs 1 lakh crore, during the Thakur said that in case of PMC Bank, the
current financial year. Reserve Bank of India has allowed withdrawal of Rs
For this, the government will provide 40,000, which covers around 77 per cent of the af-
a one-time six months' partial credit fected people and they have been assured of up to Rs
guarantee to PSBs for first loss of up 1 lakh.
to 10 per cent. The finance minister "As far as the PMC Bank or any other bank is con-
announced several short and long- cerned, it is the job of the regulators first to look into those issues. It is the
term measures to boost the auditor, who should be held responsible. It is the management of the bank who
economy in three phases between are dealing on a day to day basis and if any one is involved in fraud, ED has
August 23 and September 14, it said. taken action. People have been arrested. Their properties have been attached,"
Out of the total 44 measures an- Thakur said.
nounced, 16 have been fulfilled, it He was responding to queries on crisis at PMC Bank and depositors under stress.
said, adding the rest of the an- Thakur said the BJP government has brought in reforms to make balance sheet
nouncements are under active con-
of banks healthy, which have doled out huge amount of loan during UPA 2
sideration by relevant ministries.
regime.

6 | 2019 | DECEMBER | BANKING FINANCE