NEW DELHI: After remaining silent for almost a week over the Rs 11,400 crore PNB scam, Finance Minister Arun Jaitley on Tuesday broke his silence but only to train his guns on auditors for their failure to detect the fraud on time.
“What are our auditors doing? Both internal and external auditors really have looked the other way or failed to detect. I am sure the profession of Chartered Accountants and those who control the discipline of the profession will start introspecting and see what are the legitimate actions which are to be taken,” he said at an event here on Tuesday.
Urging the supervisory agencies to introspect their ability to perform under challenging times, he said, “And, of course, there is also an important challenge where the supervisory agencies have now to introspect what are the additional mechanisms they have to put in place to make sure that stray cases don’t become a pattern and it is nipped in the bud.”
The FM said a fitting example should be made by punishing all those involved in the scam, so that such instances don’t recur in futrure.
“I say this because these kinds of developments have a cost to the country and cost to the tax payers. It is a direct cost and it has an indirect cost, which impinges upon the bank’s capacity as a lending institution and therefore, it obviously impinges upon developmental finance,” Jaitley said.
However, he did not name Nirav Modi and Mehul Choksi, the main accused in the multi-crore PNB fraud case. “With regard to the lack of ethics that a faction of Indian business follows, it is incumbent on us as a state, till the last legitimate capacity of the state, chase these people to the last possible conclusion to make sure that the country is not cheated,” Jaitley said.
Talking on the Indian banking system, he said: “When a society has invested so heavily in its banking system... the Prime Minister himself had announced that we want you to be autonomous… None of us is going to call you up and therefore take your own decisions. When authority is given to the managements, you are expected to use that authority effectively and in the right manner.”
Putting equal blame on the management as well, he said, “Were they found lagging? And on the face of it the answer seems yes they were. They were also found lacking in being able to check who amongst them were the delinquents here.”