scorecardresearch
Follow Us:
Friday, July 10, 2020

Apply laws for PSU banks to pvt banks also: Sleuths

The idea was mooted during a meeting of officials of the Central Vigilance Commission,the CBI and other security agencies recently,official sources said.

Written by Agencies | New Delhi | Published: March 31, 2009 11:18:03 am

Agencies handling security and investigation have put forward the proposal of bringing private banks under the laws that govern public sector banks,as they (private banks) too deal with public money and no mechanism exists now to make them pay up if they go under.

The idea was mooted during a meeting of officials of the Central Vigilance Commission,the CBI and other security agencies recently,official sources said.

Sleuths and RBI officials cited the example of Madhavpur Mercantile Cooperative Bank (MMCB) and Global Trust Bank (GTB),which were taken over by public sector banks after they collapsed.

While MMCB was taken over by a public sector bank with a liability of Rs 1,100 crore,GTB was merged with Oriental Bank of Commerce with a liability of Rs 1,500 crore.

The sources said some private banks are inviting the public to invest in their schemes but there is no mechanism to hold them responsible if they go belly up.

Discussions were also held with some private bankers about the proposal but the idea was resisted,as the bankers felt this would deter other private banks from entering the business in the country.

The security agencies had also raised the point that some private banks do not share information if there are suspicious transactions.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

Advertisement
Advertisement
Advertisement
Advertisement