Will not tolerate loot of public money: PM Narendra Modi promises `strict action` on PNB fraud

He said that the management of financial institutions as well as the supervisory bodies have to do their job diligently to check such frauds.

New Delhi: Breaking his silence over the Rs 11,400-crore fraud at India's second-biggest public sector lender Punjab National Bank (PNB), Prime Minister Narendra Modi on Friday said that his government will take stringent action against financial irregularities and not tolerate loot of public money.

Days after the fraud allegedly masterminded by diamantaire Nirav Modi came to light, the Prime Minister asked the management of financial institutions as well as the supervisory bodies to do their job diligently to check such frauds.

"I want to make it clear that this government has been taking strict action against financial irregularities and will continue to take strict action," he said at an event in the national capital. "System will not tolerate loot of public money," PM Modi said.

Nirav Modi, whose diamond creations have draped Hollywood stars such as Kate Winslet and Dakota Johnson, and firms linked to him are alleged to have acquired fraudulent letters of undertaking (LoUs) from one PNB branch in Mumbai between 2011 and 2017 to obtain loans from Indian banks overseas. Central investigative agencies have raided Modi's properties and arrested bank employees.

Without naming either the alleged kingpin of the fraud, billionaire jeweller Nirav Modi, or Punjab National Bank, the Prime Minister said the management of financial institutions, auditors and regulators should perform their duty with full dedication.

"I want to make an appeal to those who have been entrusted with the job of framing rules and policies and maintaining ethics to do their job diligently and with dedication," he said, adding this should especially be followed by those who have been entrusted with the responsibility of supervision and monitoring.

Noting that the Union government is going to complete four years of assuming office in a few months, he said that a definite change is now visible. 

"This change in the economic and social content, represents the essence of the New Rules for the New India and the New Economy," the Prime Minister said.

He said that in the last four years, the discourse has changed from India being a `fragile five` economy to the target of India becoming a `five trillion dollar` economy.

Presenting figures to indicate how India is playing a key role in the entire world`s growth, he said that in nominal terms, India`s share of the world GDP has risen from 2.4 percent in 2013 to 3.1 percent in 2017.

"India is performing better on various macro-economic parameters," he said.

Modi said that this change has come about due to a new approach and a new work culture. "India`s competitiveness is being validated by the entire world today."

Recalling that when he had last attended this event, GST was still just a possibility, he said: "Today it is a reality, which has delivered a better tax compliance system and a better revenue system." He also mentioned other major reforms such as the Insolvency and Bankruptcy Code.

Giving examples of the increase in pace in the various projects in the infrastructure sector, he said that speed, scale and sensitivity are important to ensure the success of the government`s initiatives. 

"There is unprecedented investment being made today in infrastructure, agriculture, technology, health sector and education sector," he said mentioning the initiatives taken in the health sector, such as Mission Indradhanush, Jan Aushadhi Stores, and the Ayushman Bharat scheme.

About the Digital India Mission, Modi said that the trinity of 100 crore bank accounts, 100 crore Aadhaar cards and 100 crore mobile phones, would create a unique ecosystem, not seen anywhere else in the world.

Recalling that in his last address at the event, he had spoken of Housing for All, Power for All, Clean Cooking for All, Health for All, and Insurance for All, he now outlined the steps that have been taken in regard to house construction, Ssaubhagya yojana, Ujjwala Yojana, and insurance. 

Saying that the government's initiatives are aimed at empowering the poor, the Prime Minister also mentioned the construction of toilets, distribution of loans through the Mudra Yojana and distribution of soil health cards.

(With agency inputs)