PNB scam effect? Govt to shut 35 non-viable overseas branches of state-run banks

The Centre on Thursday decided to close down 35 non-viable overseas branches of Indian public sector banks (PSBs). It has also identified another 69 such branches for a possible closure.

These include bank branches, joint ventures, subsidiaries, remittance centres and representative offices.

Besides, the Centre is also looking at downing shutters of all non-viable operations in the overseas markets for cost efficiency and synergy, Financial Services Secretary Rajeev Kumar said.

He said all 216 PSB overseas operations will be examined to ascertain if their operations are viable.

"The government is committed to clean and responsive banking and as an action plan for PBS reform agenda, the bank operations in the same geography will be consolidated," Kumar said in a tweet.

Besides, he said the government is also planning to consolidate equity stake in joint ventures having multiple PSB partners.

Though the government did not give any timeline for its action but the secretary said the implementation will be based on the strict timeline.

The tightening of norms for banking sector comes in the wake of Rs 12,700 crore Punjab National Bank fraud allegedly committed by jeweller designer Nirav Modi and his group of companies along with his uncle Mehul Choksi.

In a similar move, the Centre on Tuesday had asked all public sector lenders to tighten their vigil on all loans above Rs 50 crore to check for a possible fraud.

The government is also expected to bring a law in Parliament that will allow it to confiscate properties of economic offenders who flee the country.