There are a number of reasons for the government to implement wider governance reforms in Public sector banks. Examine (200 Words)
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· The government announced that the Prevention of Corruption Act had been modified and permission would be required for initiating action against public servants.
· It has also modified the 2015 framework on large-value frauds. As a result, managing directors and chief executive officers in public sector banks (PSBs) will not be personally responsible for compliance with different timelines.
· Therefore, an initial examination before the investigation is launched should help bankers. However, it is difficult to argue that these steps will be enough. Legal safeguards, in general, do not always prohibit investigating agencies from launching probes, or even making arrests.
· Besides, the government should not lose sight of the broader picture. Frauds and non-performing assets (NPAs) in PSBs are not always a result of corruption.
· As the RBI’s latest Report on Trend and Progress of Banking in India showed, PSBs accounted for over 90 per cent of the amount involved in fraud during 2018-19, “mainly reflecting the lack of adequate internal processes, people and systems to tackle operational risks”.
· This clearly indicates that PSBs need wider reforms to build capacity in evaluating risks associated with lending. In the absence of reforms, PSBs will remain vulnerable to frauds and the fear of investigation, despite the safeguards put in place by the government.
HB 5 years
please review
IAS Parliament 5 years
Good attempt. Keep Writing.
