February 27, 2018 / 6:52 AM / 2 years ago

India asks state banks to fix operational gaps in 15 days after $2 billion fraud

The logo of Punjab National Bank is seen on the facade of its office in Mumbai, India, February 21, 2018. REUTERS/Danish Siddiqui

NEW DELHI (Reuters) - India’s finance ministry on Tuesday set a 15-day deadline for state banks to take pre-emptive action against operational and technical risks, following a $2 billon fraud at the country’s second-biggest state lender.

Rajeev Kumar, secretary in the department of financial services, said in a tweet that state-run banks have 15 days to “take pre-emptive action and identify gaps/weaknesses” to tackle rising operational and technical risks.

Besides fixing “clear accountability” of senior officials, the banks must also learn from best practices and pinpoint strategies including technical solutions, Kumar added.

State-run Punjab National Bank (PNB) (PNBK.NS) this month disclosed a $2 billion fraud, stunning the country and putting the lack of supervisory oversight by the central bank and auditors under the spotlight.

Reporting by Devidutta Tripathy; Editing by Malini Menon

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