New Delhi: In the aftermath of alleged Rs 11,400 crore Punjab National Bank (PNB) scam, the Confederation of Indian Industry (CII) on Sunday called for better and hi-tech control systems to check financial frauds.
The apex industry body also pressed for a gradual decrease in government holding in public sector banks (PSBs).
The government should strategically divest its stake in PSBs to 33 percent in a phased manner and adopt a twin strategy for tackling financial frauds, including better monitoring and supervision of banks and adoption of best corporate governance standards, the Confederation of Indian Industry (CII) said in a release here.
"The government, regulators and industry must act fast to address systemic risks in the financial sector," CII President Shobana Kamineni said in a statement.
"The three key solutions for the banking sector are better management and operational efficiencies, use of technology such as blockchain and big data analytics, and lowering government shareholding in public sector banks," the CII statement read.
Noting that technology could be a major enabler for monitoring transactions that are subject to financial fraud and risks, the CII said, "Some banks are already deploying artificial intelligence, big data and blockchain technologies to better regulate their operations."
The CII said that it is important to minimise human interface in such transactions to lower the risk of misdemeanours.
The CII president, however, cautioned that such instances of collusion between corrupt bank officials and scamsters should not lead to a situation of choking of credit to the industry.
"It is time for the government to consider consolidation of PSBs and develop a few strong banks which adhere to the best standards in governance, accountability and transparency," the CII said.
The CII president also called for a roadmap for bringing the government stake down to 33 percent in three to four years.
As per the charges filed in diamond merchant Nirav Modi case, bank Letters of Undertaking and Foreign Letters of Credit were used to raise and rollover the money over several years before the fraud came to light following the PNB's complaint.
(With Agency Inputs)