Public money in State-owned banks is 100 per cent safe and secure, Finance Minister Piyush Goyal said on Tuesday against the backdrop of several cases of fraud, including the $2 billion scam at PNB unearthed recently.
Speaking to the media after meeting heads of public sector banks (PSBs), he also said the government is open to the question of giving more powers to the Reserve Bank for effectively regulating PSBs.
“let me reassure everybody that public money is extremely safe in the public sector banks. Government stands behind public sector banks... Government owned banks’ deposits are 100 per cent safe and secure,” he said.
Goyal added however that he does not know “how safe it is in private sector and some of the companies which have income tax dues, which they don’t pay”.
Several cases of frauds have surfaced in the recent past at PSBs.
The most talked about fraud allegedly involves Nirav Modi, who along with associates, used fake letters of Undertaking (loUs) defrauding State-owned Punjab National Bank to the tune over $2 billion.
Various investigating agencies are probing the over $2 billion fraud allegedly committed by diamond jeweller Nirav Modi and his associates.
Goyal said the frauds were perpetrated by private companies and not PSBs.
In reference to recent suggestion by RBI Governor Urjit Patel that the central bank lacked powers to effectively deal with PSBs, Goyal said RBI has powers, but if additional powers are needed the government was open to the idea.
“We believe that powers are available with the Reserve Bank and that is the conversation that the government and Reserve Bank will have amongst themselves,” Goyal told the media after meeting heads of 13 PSBs here.