How PNB Scam Can Impact The Health Of India’s Economy

Financial crimes and frauds are not a new thing in India, and it has been happening every now and then. There were various scams in which some top politicians and businessmen were involved which damaged the wealth of India’s treasury. Scams ranging from few hundred crores to thousands of crores always became headline of the media and it at times even cost the person sitting in that particular portfolio lose his or her ministry and face the tough questions of law. However, corruption is an ongoing practice and scams have become a regular thing in the country. But all these scams were directed to robbing the money of the public which they gave to the government in the form of taxes.

However, scammers can target your money anywhere which includes your bank as well. Our money might not be safe in the bank also came into light when the Punjab National Bank fraud case was unearthed. This was probably the biggest banking fraud in the history of India’s economy. The PNB scam was worth 11,300 crores which was enormous and was good enough to deteriorate the health of the bank to a great extent. The prime culprits in this scam were two persons, jeweler and designer Nirav Modi and Mehul Choksi. Nirav Modi’s wife and brother were also allegedly the part of this bank fraud.

This scam sent shockwaves not only on the economic front but also in the political scenario. Allegations and accusations flew from both ends blaming each other for not checking on these fraudulent elements. After committing the scam, Nirav Modi absconded out of India and reports are that he is trying to gain political refuge in the United Kingdom.

This bank fraud also unearthed several flaws in the banking system of India and exposed that how the public sector banks of India are easily susceptible to such kind of frauds.
India’s reputation is already on the worst side when it comes to bad loans and financial scams. The government sprung into action to do the damage control and to bail out PNB out of its crisis. As a result, the noose was tightened almost on all the money lenders from the bank and was asked to repay their loan as soon as possible. PNB holds thousands of accounts of common people including the pension account of the war veterans via which the money is disbursed.

Questions are also raised on the functioning of the bank that how the employees of PNB has managed to issue LoUs in favor of Nirav Modi for seven straight years without coming into the notice of the auditors. Even if these LoUs were fake, then how the bank honored them without any cross-checking. There is a serious need for strengthening internal control and the department that detects the frauds. The case of PNB scam is a hot political issue now, and the Indian government is trying everything in its power to extradite Nirav Modi from the United Kingdom and back to India. It is also taking help of the Interpol which has already put notice against this financial fugitive of the country.

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