Following the £1.13 billion Punjab National Bank fraud, Finance Ministry is in the works to set up new regulatory measures. Writing to Hong Kong branches of four Indian banks, it asked them to reconcile accounts and check for irregularities. Reconciliation of an account involves confirming whether the money leaving an account matches that amount that's been spent. A report said that four lenders, SBI, Axis Bank, Allahabad Bank, and Bank of India, have been issued Letters of Undertaking (LoUs) by PNB's Mumbai branch.
The state owned banks will now appoint a special representative or agency to monitor status for all loans of above £25 million, and that a consortium of lenders cannot exceed seven banks. The measures come as the first definitive steps taken by the department since the scam, broke out. Finance Minister Arun Jaitley had earlier last week hit out at auditors and supervisory agencies, asking them to “introspect” to avoid cases of financial wrongdoing.
