My compliments for the brilliant editorial titled “Mr Patel is right” (March 16). One “good” thing that the Nirav Modi/Punjab National Bank (PNB) scam has done is to highlight to the nation several flaws in the governance and regulation of public sector banks (PSB). Notwithstanding Urjit Patel’s somewhat theatrical comparisons with mythology—“ready to be Neelkantha and drink poison” or the Reserve Bank of India (RBI) being “the mandara, mount or the churning rod in the amrit manthan or the samudra manthan”—his outburst and the no-words-minced frank talk is bound to set the ball rolling for some constructive action by the government to remove, or at least minimise, the governance norms for public sector banks (PSBs).
He has indeed gone overboard in defence of the central bank, thus trying to prove that the RBI had no responsibility at all in this disgusting saga—and, yet, a lot of what he says makes eminent sense and deserves solid corrective action by the government. It is indeed shocking that amendments to the Banking Regulation Act have taken away all (read some) powers of the central bank when it comes to the PSBs. Without going into whether all that Patel said is correct or not, it would indeed be good if the fissures or fault lines are removed and possible tremors avoided in the future.
That there are inconsistencies and weaknesses in our banking regulation systems is now a given; the issue is to make systemic corrections and set it right. It is not a question of asuras and devas taking sides, as the RBI governor goes on to add—carried away by his own dramatic style—it is a matter of a healthy in-depth review of the laws and arriving at what is good for the country. If anyone can remove the anomalies, our present government is perhaps the best suited to do so.
Here’s hoping that such reviews will also extend to the role of auditors and the top management of the banks.
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