In a scathing attack on banks and insurance companies caught in the Cobrapost expose, Rajiv Takru, Financial Services Secretary, said the entire incident is worrisome.
The online magazine did a sting operation at some of the branches of 26 banks and insurance companies across the country wherein officials were captured on camera offering to convert tax-evaded money into legitimate money.
The senior Finance Ministry official admonished some bankers’ observations that these are minor aberrations in the system and were a result of loose talk by managers.
Reminding banks that they are the trustees of public money, Takru said, “There is very little scope for banks to fool around with the basics of banking.”
He asked the bank chiefs and top officials to have zero-tolerance towards deliberate irregularities in ‘know-your-customer’ and other norms and advised them to come down on the erring officials like a “tonne of bricks.”
Takru also said that the Reserve Bank of India has initiated the process of punishing the errant banks. The central bank has to follow certain procedures before punishing them.
While saying that the Rs 1 crore penalty is less than peanuts (sic), he said the lawmakers have to legislate on higher penalty. “This is under discussion and my personal opinion is that the fine should be Rs 500 crore…maybe that will hurt a little bit,” he said.