Announcing this through the Finance Ministry's Twitter handle, Financial Services Secretary Rajeev Kumar also said that executive directors and chief technological officers of the PSBs have to prepare a blueprint for combating increasing risks.
"15 day deadline for PSBs to take pre-emptive action and identify gaps/Weaknesses to gear up for rising Ops and Tech risks; To learn from best practices and pinpoint strategies including tech solutions; Clear accountability of senior functionaries," Kumar tweeted.
The Ministry has also directed government owned banks' managing directors to examine all non-performing assets (NPAs), or bad loans, above Rs 50 crore "for possible fraud" and if there are any violation of laws on money laundering and the Foreign Exchange Management Act, Kumar said.
"PSB MDs directed to detect bank frauds and consequential wilful default in time and refer cases to CBI. To examine all NPA accounts > Rs 50Cr for possible fraud. Involve ED/DRI for PMLA/FEMA/EXIM violations if any," he said in a separate tweet. Late on Monday night, PNB informed stock exchanges that the amount of fraudulent transactions involving the Nirav Modi scam could go up by over Rs 1,300 crore.
Industry Bodies Welcome:
Industry body Ficci on Wednesday welcomed the government’s decision to set a 15-day deadline for public sector banks (PSBs) to examine all non-performing assets above Rs 50 crore for possible fraud and to identify operational and technical gaps."This whole effort, especially linking of frauds to the wilful defaults, though, is an exercise that needs to be carried out cautiously and the government must ensure that investigations don't cripple lending and dampen business sentiment further," said FICCI President Rashesh Shah.
"With continuous efforts from the government and RBI, PSBs should strengthen their risk management practices with an immediate sense of urgency. Simultaneously, with the action on the existing NPA accounts, an effective time-bound action plan for infusing transparency and a robust risk management system in these banks is a necessity," he added.