Government taking strict action against financial irregularities, crackdown will continue: PM Modi

NEW DELHI: Prime Minister Narendra Modi today asserted that the government has a zero-tolerance policy on corruption and is cracking down on all manner of financial irregularities.

"This government is taking stringent action against irregularities related to economic issues and will continue to do so. This system will not accept irregular acquisition of public money," PM Modi said at the Global Business Summit here.



The Prime Minister's statement assumes significance in light of the multi-crore loan defaults reported by public sector banks over the last few weeks.

Diamond billionaire Nirav Modi and his uncle and business partner Mehul Chowksi embezzled $1.8 billion from Punjab National Bank (PNB) by fraudulently obtaining loans. PNB says the fraud began as early as 2011 and remained undetected due to the collusion of some of its employees, who issued unauthorised letters of undertaking that Modi's firms used to get credit from overseas branches of other banks .

Without naming either the alleged kingpin of the fraud, Nirav Modi , or PNB, PM Modi appelaed to the management of financial institutions as well as supervisory bodies to do their job diligently to check such frauds.

Those responsible for implementation of rules and regulations in financial institutions, especially those who have been entrusted with the task of monitoring, should carry out their work with complete dedication, the PM said.



This was PM Modi's first public reaction to the scam since it came to light last week. The Prime Minister's enduring silence on the issue had galvanized the opposition, which alleged that the government was complicit in the swindle and was shielding the offenders. Both Nirav Modi and Chowksi had fled India before they could be charged for the fraud.

Earlier in the day, Congress leader Anand Sharma said public money needs to be secured and the Government of India and the Reserve Bank have a responsibility, both legal and moral, to assure depositors and citizens that their money is safe.

"The government must come out with a white paper on the state of banks and list of all wilful defaulters, together with a list of all bank frauds that have taken place in the last two-three years," Sharma said, adding that it is important to know what has been its action and the losses incurred due to these two bank frauds and other such cases.

Finance Minister Arun Jaitley on Wednesday assured that government will chase down offenders like Nirav Modi to the end, even as he berated the management of PNB for its failure to detect the fraud which had been going on for seven long years.

Jaitley had said the government had been step by step addressing issues like high-level of bad debts and need for more capital, but the effort has been put to challenge with the unravelling of the fraud.

Read this story in Marathi