New Delhi | Reserve Bank of India governor Urjit Patel on Tuesday appeared before the parliamentary committee on finance and briefed them on the current bank crisis. The RBI governor faced tough questions on the Nirav Modi scam when he appeared before the committee on finance headed by Congress’s Veerappa Moily, which includes leaders from several parties besides former Prime Minister Manmohan Singh.
According to sources, senior parliamentarian questioned Urjit Patel how Nirav Modi managed his illegal transactions for several years “despite the RBI’s supervisory norms”. Mr. Patel was also asked who was accountable for the failure.
How were fake LoUs (Letters of Undertaking) going around for several years and why did the RBI fail to notice, Mr. Patel was asked by MPs. “Why didn’t RBI check the credentials? RBI has powers to check and investigate every branch anywhere. Why didn’t it use the power?” the RBI chief was asked by a senior parliamentarian.
The RBI head was also questioned on the impact of demonetisation and bad loans, specifically the Rs. 13,000 crore-PNB fraud. The Panel further asked Patel, the scale of the PNB (Punjab National Bank) scam that took place despite the Reserve Bank of India’s checks and balances and raised questions on the quality of monitoring.
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