The Telegraph
Friday , August 22 , 2014
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FM holds out bank hope

New Delhi, Aug. 21: Finance minister Arun Jaitley today said he was committed to bringing in better risk-management practices in state-run banks following the recent bribe-for-loan scam in Syndicate Bank involving its top management and a steel maker.

“I would only hope that they are a drop in the ocean, and we have all learnt the lessons from such incidents, and there will be no repetition of them,” Jaitley said at the foundation day ceremony of Indian Bank here today.

The government would also take steps to professionalise the management structure of PSU banks. “We expect banks to have better risk management and professionally-run management. The department of financial services is working in this regard,” Jaitley said.

Earlier this month, chairman of Manipal-based Syndicate Bank Sudhir Kumar Jain was arrested on charges of accepting a bribe for rolling over a loan to loss-making Bhushan Steel.

A forensic audit has now been ordered into the affairs of the steel company. Forensic audits and discreet probes are also being conducted into certain other state-run banks with a dubious portfolio.

Bad loans have surged in the wake of a sub-5-per-cent growth along with a poor scrutiny of loans being sanctioned or rolled over have led to a surge in bad loans.