RBI initiates inspection of Syndicate Bank

Tags: News
The Reserve Bank today said it has initiated inspection of the book of accounts of Syndicate Bank, whose CMD S K Jain was recently arrested by the CBI for allegedly taking a bribe of Rs 50 lakh.

Admitting that there are governance issues in the public sector banks, RBI Governor Raghuram Rajan underlined the need for improving transparency in sanction of loans.

"There is an inspection underway of Syndicate Bank but I think one has to be very careful about extrapolating this issue to entire banking system without thinking further through. It (Syndicate Bank episode) does raise the troubling issue," Rajan said after unveiling third bi-monthly monetary policy review.

CBI arrested Syndicate Bank Chairman and Managing Director S K Jain on August 2 for allegedly accepting bribe of Rs 50 lakh to enhance the credit limit of some companies.

"It is important for an enforcement agency to ensure full investigation is done. I think they are doing that...All the problem in the banking system is because of criminality rather than because of other factors," he said.

"I think balance has to be maintained and we have to be also careful. While we do thorough investigation and culprit are brought to book, it does not become a witch-hunt which then stalls the entire credit process," he added.

Rajan emphasised that there is need to overcome deficiency in the public sector banking system.

"We need to again look at the governance of the public sector bank and understand the deficiency there and try and improve it," he said.

Acknowledging that there are lots of highly qualified, highly reputable people working in the public sector bank, he said "they should not be tarred with same brush".

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Redefining the age of minors from 18 to 16 makes sense

    An issue that’s been simmering since the horrific gangrape of December 2013 is finally being laid to rest.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

The difficulties with war history

There have been a series of commemorative events lately. Last ...

Anish Chakraborty

Betting big on Pascal’s wager

Blaise Pascal was a 17th century French philosopher mathematician and ...

Bubbles Sabharwal

The five cardinal rules of urban snobs

Believe it or not there is the unspoken-of society of ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture