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RBI Governor Urjit Patel will be asked to clarify on recent bank scams and bad loans, sources said

New Delhi:  A parliamentary panel has asked Reserve Bank of India Governor Urjit Patel to appear before it on May 17 to clarify on recent banking scamspeople familiar with the matter said. The standing committee on finance, headed by Congress leader M Veerappa Moily, today raised queries about the banking sector with financial services secretary Rajiv Kumar.

“We have invited the RBI governor on May 17. We will be asking him about the scams and other banking regulations,” a person with direct knowledge of the matter told news agency Press Trust of India.

Former Prime Minister Manmohan Singh, who is also a member of the committee, attended the meeting.

India’s banking sector has been hit by several fraud, one of the biggest being the alleged bank fraud in Punjab National Bank or PNB, perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi. Both are not in the country. The authorities say they are trying to bring the two businessmen — accused in the over Rs 12,500 crore PNB scam — to India.

Urjit Patel recently said that the RBI doesn’t have enough powers to deal with pubic sector banks or PSBs.
 

pnb scam

Nirav Modi and his uncle Mehul Choksi are accused in the Punjab National Bank (PNB) fraud case

“We would like to know what kind of powers the RBI governor needs,” another person with direct knowledge of the matter said. Regulation is an important part and that is why the governor has been called, said the person who asked not to be identified.

The parliamentary panel discussed a spate of banking scams, both in public and private sector banks, people familiar with the matter said.On whether the PNB scam and the ICICI Bank alleged conflict of interest case figured during the meeting, one of the people quoted above said that issues related with “all commercial banks, including ICICI Bank” were discussed.

The finance ministry officials gave part replies to queries of the lawmakers and they have been given three weeks to file a complete report on the questions.

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