Regulator, auditor should be held responsible for frauds in banks: Anurag Thakur

Thakur said that in the case of PMC Bank, the Reserve Bank of India has allowed withdrawal of Rs 40,000, which covers around 77 percent of the affected people and they have been assured of up to Rs 1 lakh.

New Delhi: The regulator, auditor and management should be held responsible for fraud in Punjab and Maharashtra Co-operative Bank or other banks, Minister of State for Finance Anurag Thakur said on Thursday.

Thakur said that in the case of PMC Bank, the Reserve Bank of India has allowed withdrawal of Rs 40,000, which covers around 77 per cent of the affected people and they have been assured of up to Rs 1 lakh.

"As far as the PMC Bank or any other bank is concerned, it is the job of the regulators first to look into those issues. It is the auditor, who should be held responsible. It is the management of the bank who are dealing on a day to day basis and if anyone is involved in fraud, ED has taken action. People have been arrested. Their properties have been attached," Thakur said at Times Network India Economic Conclave event.

He was responding to queries on crisis at PMC Bank and depositors under stress.

Thakur said the BJP government has brought in reforms to make a balance sheet of banks healthy, which have doled out huge amounts of loans during the UPA 2 regime.

"It was the UPA 2 when from 2009 to 2014. If you look at the loan till 2009, the total outstanding was Rs 18 lakh crore. In 2014, it came out to be Rs 58 lakh crore.

"When we took over, and the late finance minister Arun Jaitley ji went for asset quality review of the banks. We have cleaned the bank balance sheets. We have recapitalised them. We have gone for the merger which was suggested 20 years back to bring in more synergy and capacity building of the banks.

"Others are making a profit. Bank like PNB, which three years back was facing the question, is in profit today. We brought in reforms like Insolvency and Bankruptcy Code, fugitive economic offenders bill," Thakur said.

He said the government has been able to bring back Rs 1.78 lakh crore just because of the IBC.

"It has improved creditors debtors relationship. We have funded Rs 3,44,830 crore through the banks to NBFCs. All the steps have been taken," he said.

The minister noted that the government is taking the decision to make the fundamentals of the economy strong.

"We are taking every possible decision to boost investment and growth to achieve USD 5 trillion economy," Thakur said.

The International Monetary Fund (IMF) on Tuesday slashed India's GDP growth projection for the year 2019 to 6.1 per cent, which is 1.2 per cent down from its April projections.

The IMF in April said India will grow at 7.3 per cent in 2019. However, three months later it projected a slower growth rate, a downward revision of 0.3 per cent.

As against India's real growth rate of 6.8 per cent in 2018, the IMF in its latest World Economic Outlook projected India's growth rate at 6.1 per cent in 2019 and noted that the Indian economy is expected to pick up the next year at 7.0 per cent.

Thakur said that the fundamentals of the Indian economy is strong and it will bounce back.

On questions related to slowdown, Thakur said that the traditional businesses are facing challenges from start-ups and new technologies.

"Till 2014, it (India) was USD 1.7-1.8 trillion economy. We have added USD 1 trillion in the last 5 years. If you could do that in the last 5 year, let me assure you we can achieve USD 5 trillion economy mark. Mr (Narendra) Modi is known for big and bold decisions. He has never failed. In 2025, we will be USD 5 trillion economy. You mark my words," Thakur said.