The government will not tolerate embezzlement of public funds and will continue to come down strongly on instances of financial irregularities, Prime Minister Narendra Modi said on Friday, his first comments on the Rs 11,400 crores Punjab National Bank fraud that erupted last week.
Celebrity diamond designer Nirav Modi, counted among India’s richest, has been accused of acquiring fraudulent letters from a Mumbai branch of PNB that let his firms get credit from Indian banks abroad.
The bank had initially suggested that the fraud was made possible by a couple of officials at the branch level but as the investigation began, there have been demands that the government-funded bank’s senior management also should be held accountable.
Recognising the crucial role that the top management and banking regulator RBI had to play to avoid such frauds, PM Modi also turned to people entrusted with the responsibility of ensuring rules and ethics in various financial institutions.
They should, he appealed, work with full dedication – especially those who are responsible for supervising and monitoring. Illegal accumulation of people’s money is unacceptable, and this is the basic mantra of “New Economy – New Rules”, PM Modi said addressing a gathering at Economic Times Global Business Summit.
The scam has blown up into a major confrontation between the ruling BJP and the Congress-led opposition which has claimed that a fraud of such scale could not have taken place without “top-level protection”.
The ruling BJP had initially fielded Defence Minister Nirmala Sitharaman, Law Minister Ravi Shankar Prasad and Education Minister Prakash Javadekar to counter the Congress barbs. Later Finance Minister Arun Jaitley appeared to blame the PNB management and auditors for letting the celebrity diamond designer pull off the fraud.