DNA Money Edit: Another scam to rock India's banking sector

Despite introducing stricter rules in India's banking sector, there seems to be no scarcity of scams. They continue to shock people at regular intervals. Fraudulent borrowers having a nexus with a bunch of unscrupulous bankers taking the system for a ride is a common plot. But the new fraud that has come to light on Wednesday surely takes the cake. Clearly, it is the biggest to rock India's banking sector so far. The fraud that is currently pegged at around Rs 11,000 crore threatens to grow much bigger as the probe intensifies.

It is strange that Punjab National Bank, India's second largest public sector bank after State Bank of India (SBI), could not stop such a massive fraud perpetrated over a long period. The bank said it is still assessing the impact of the allegedly fraudulent transactions. Many fear that the fraudsters have potentially exploited the letter of undertaking (LoU) facility provided by other banks as well. In this particular case of PNB, advances were being disbursed in Hong Kong by Axis Bank and Allahabad Bank to some of the leading jewellery companies in India.

One can only hope that the investigation agencies will nail every culprit involved in this fraud at the earliest. For the Reserve Bank of India, the Operation Clean-up looks like an unending process.