NEW DELHI: The Indias Finance Minister, Dr. Manmohan Singh, told the Rajya Sabha recently that he did not see any need to change the Government’s policy of allowing foreign banks to Expand their operations and permitting more banks to enter the country, inspite of the involvement of four foreign banks in the financial scam.
He said during question hour that apart from the foreign banks, the nationalized banks and private banks were also involved in the problem exposure and that the Reserve Bank of India had ordered a special audit with regard to the four foreign banks.
Asked about the RBI Governors reported statement that only about Rs2000crore out of Rs 3500 crore involved in the securities scandal could be recovered, Dr.Singh said it was impossible, for him to say at this stage with finality about the amount that could be recovered. He also declined to indicate whether the amount of key could be larger than that indicated by the Janakiraman Committees report, saying that beyond that I have no other figures to go by.
Dr.Singh stoutly defended the RBI Governor, Venkitaramanan, claiming that the latter had found the irregularities in securities transactions in the month of March and since then he had worked diligently to unravel the fraud and that he had functioned in a manner worthy of his office.
The Finance Minister said it would be grossly unfair to insinuate that the RBI Governor was personally involved in perpetuating the fraud. The members accused Dr-Singh of giving a clean chit to the RBI Governor without making personal inquiry into his conduct over the last few months.
He said there was no doubt that there had been collusion of bank officials with some unscrupulous persons in the stock market and there were weaknesses in the banks since the top management did not know what was happening. He added that by hindsight, can say that a tighter system of monitoring and super vision was necessary.
Dr.Singh was apparently stumped when the former Finance Minister, Yashwant Sinha (SJP) asked him whether the former chairman of SBI, who had been asked to go on leave, had been found to be personally involved, The Finance Ministers statement that the RBI Chairman had to go as he had failed in his responsibility to be vigilant, though not being directly involved, was greeted with jeers from the Opposition benches.
Dr.Singh said he did not have a son and neither was any of his daughters working in a bank, Indian or foreign. Referring to the allegation that a Minister was receiving pension from the World Bank, he said I know the reference was to me. I have never been in employment of either the IMF or the World Bank and there is no question of receiving any pension.
Article extracted from this publication >> July 31, 1992
