This refers to the editorial, “Time for reform” (February 20). Days after the Punjab National Bank (PNB) fraud came to light, another state-run bank has reported a million dollar scam. Rotomac pens owner, Vikram Kothari, has been accused of fleeing with loans of more than Rs 3,700 crore from various public-sector banks in the country. With the intensity of fraudulent schemes only increasing with every ‘outing', we have to reconcile ourselves with the simple truth that we are a nation of sorry onlookers that can do nothing but express shock and dismay over every act of sleaze and debauchery exposed.
While the rip-off exposes the biggest flaws in the Indian banking system, loopholes allow such massive frauds to happen and apparently many go unnoticed. But more paradoxical is the fact that a bank, that allowed Rs 11,400 crore to be siphoned off from its coffers, won two Vigilance Excellence Awards in the last four years. So much for the evaluation and the grading system for vigilance in financial institutions in the country! While international banks tightened corporate governance after the subprime credit crisis in 2008, most Indian banks appear to have remained laggards, and seemingly this made it much more easier for them to fall prey to the guiles of scamsters. In view of the number of bank employees being implicated in the great grand PNB scam, the need of hour is to re-think on policies. Instead of the Know Your Customers regulations the banks insist on, they need to focus first on Know Your Employees as a strict HR guideline for employment.