The backdrop of the RBI action is the $1.77 billion fraud at India’s second largest government-owned bank by assets, Punjab National Bank (PNB). There are different kinds of risks such as global risk, macroeconomic risk, financial market risk, institutional risk and general risk. The PNB fraud is an offshoot of operational risks, part of institutional risk in the survey. RBI does not appoint the chairman, managing director and other directors of a bank board; the government does this (in consultation with RBI). Let’s hope that in the history of Indian banking fraud, it takes many more years to eclipse Gokul Shetty’s alleged record.

Source: Mint February 26, 2018 02:26 UTC