Post-Modi-PNB scam; banks change its various rules and regulations

With the fraud cases coming to light, the banks have realized the numerous loopholes in their system? So now what stands have they decided?

State-owned lenders have started rationalizing the overseas operations by consolidating 35 operations and closing down non-viable branches as part of the clean and responsible banking initiative.

As per the banking sector agenda approved at the PSB Manthan in November last year, public sector banks (PSBs) have to examine all 216 overseas operations.

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PNB fallout

The rationalization of overseas operations of banks is significant as jewelry designer Nirav Modi allegedly cheated Punjab National Bank (PNB) of ?12,700 crore in connivance with PNB staff and officials of overseas branches of other State-owned banks. Presently, public sector banks have about 165 overseas branches, besides subsidiaries, joint ventures, and representative offices. State Bank of India has the largest number of overseas branches (52) followed by Bank of Baroda (50) and Bank of India (29).

The State-owned banks have the largest number of branches in the United Kingdom (32) followed by Hong Kong and UAE (13 each) and Singapore (12).

“PSBs to consolidate 35 overseas operations without affecting the international presence of PSBs in these countries; 69 ops identified for further examination. Move towards cost efficiencies and synergies in the overseas market,” Financial Services Secretary Rajiv Kumar said in a tweet.

READ ALSO: After effect of PNB fraud: Loans above this limit should be treated as fraud

Expressing the government’s commitment to ‘clean and responsible banking,’ the tweet said the overseas operations of the State-owned banks will be rationalized.

As part of the rationalisation of overseas operations, the graphic that accompanied the tweet said, “PSBs to consolidate 35 operations. 69 operations identified for possible consolidation. Includes bank branches, remittance centres and representative offices.”

If further said: “All 216 PSB operations to be examined. Non-viable operations in overseas market to be closed for cost efficiency and synergy. Operations in some geography to be consolidated.”