Don't let PNB fraud halt business lending: ASSOCHAM to Arun Jaitley
The industry body said the country can ill-afford cut down on lending at a time when the credit growth was about to recover and the economy was set to grow at a higher pace
Leading business body ASSOCHAM today cautioned against allowing the alleged fraud in the Punjab National Bank (PNB) to halt the entire system of corporate lending, as demoralisation would set in among the top functionaries and employees of the state-owned banks.
It said that the country can ill-afford cut down on lending at a time when the credit growth was about to recover and the economy was set to grow at a higher pace.
“While we may seek long-term solutions like privatisation of the banks, the need of this hour is to rally around honest bank officers and the honest business entities which have built trust on each other," the trade body's secretary general D S Rawat said.
Rawat said let one or a few black sheep not derail our financial system, which is resilient enough to withstand this kind of shocks, though ideally such jolts are better avoided and averted through systemic reforms.
ASSOCHAM noted that there are disturbing reports about banks clamping down certain impractical rules and procedures for trade finance, affecting both importers and exporters.
“The letters of credit or letters of undertaking are an internationally accepted system of global trade. While we need to ensure safe and sound functioning of the system and not allow loopholes like those in the PNB system of money or guarantee transfer, let banks not over-react and hit the trade and industry.”
The January export data shows a deceleration in growth even when the global economy is on the uptick.
The prick up in the domestic economy would require higher imports. Thus, both imports and exports are key to our economy and we have come a long way in scaling up the inter-face between the government agencies and the trade over the years.
It is time to correct the systems which had allowed the misuse and move on with the task of achieving higher economic growth.
“How else we encourage investment and jobs if we do not infuse confidence and trust in our financial system,” Rawat said.
Rawat said, however, urged the Finance Ministry to take strong actions against the offenders.
“By all means, punish the offenders at a fast speed and set examples; but the business should not be allowed to halt. There is a need for vigilance among all the lenders, even in the private sector. After all, in an ever-connected world there are several common technology pathways, which can be subverted. It is about time to restore confidence and move on.”
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
05:19 PM IST