Washington,<\/p>\n
The talk of India\u2019s banking sector plunging into a financial crisis is nothing but \u201cfear-mongering\u201d as the amount of fraud in the Nirav Modi case is equivalent to just three days of interest of the country\u2019s \u201csolid\u201d banking sector, BSE CEO Ashish Chauhan has said here.<\/span><\/p>\n <\/p>\n India\u2019s second-largest state-run lender Punjab National Bank (PNB) was hit by the country\u2019s biggest-ever banking fraud of more than Rs 13,000-crore allegedly perpetrated by billionaire diamantaire Nirav and his associates in connivance with some bank officials.<\/span><\/p>\n <\/p>\n A special CBI court has issued non-bailable warrants against Nirav and his uncle Mehul Choksi.<\/span><\/p>\n <\/p>\n Addressing the Massachusetts Institute of Technology (MIT) students at the annual MIT India Conference on Sunday, Chauhan, the Bombay Stock Exchange (BSE) head, said India\u2019s banking sector is fairly strong and regulated.<\/span><\/p>\n <\/p>\n In fact, the amount of fraud being talked about in the PNB case is just three days of interest of the country\u2019s banking sector, he said.<\/span><\/p>\n <\/p>\n Chauhan, however, said the scandal would not have taken place had appropriate reforms in the banking sector, including the RBI, been taken after the 1992 Harshad Mehta scam.<\/span><\/p>\n <\/p>\n \u201cWe should have reformed the banking sector in 1992. This (Nirav Modi scam) would not have taken place if we had carried out the reforms then. But we have woken up now, we are doing a good job. One of them is demonetisation, other is the GST and third one is bankruptcy code,\u201d Chauhan told participants of the day-long conference on the theme of Pioneering Innovation.<\/span><\/p>\n <\/p>\n Chauhan said the size of the Indian banking system is \u201cRs 1 crore crore\u201d.<\/span><\/p>\n <\/p>\n \u201cIn India we (banks) charge 12 per cent per annum from people who borrow. People who lend to the banks, we give them only four per cent. So basically, the banks earn eight per cent (profit).<\/span><\/p>\n <\/p>\n \u201cSo, on Rs 1 crore crore, how much interest you get in one year at 12 per cent? Rs 12 lakh crore. In one month, how much you would get? Rs 1 lakh crore. In three days, how much you would get? Rs 10,000 crore. What is the size of the Punjab National Bank\u2019s this particular scam? It\u2019s three days\u2019 interest of the Indian banking system, which will take care of this (scam),\u201d the BSE head said.<\/span><\/p>\n <\/p>\n \u201cIt happens. It is a commercial thing. When they (banks) are taking eight per cent margins, they are assuming that one out of 12 guys is going to be a defaulter. And still they would be okay. They will pay the principal back. One out of those 12 guys in that year has to default,\u201d Chauhan said.<\/span><\/p>\n <\/p>\n \u201cThis (Nirav) guy has defaulted over 10 years. So effectively it\u2019s 1\/10th of the banks. The banking actually works on this. They think it\u2019s the public money. They have already taken the money out of you by not paying the interest.<\/span><\/p>\n <\/p>\n \u201cEffectively there is nothing there (in the scam). It\u2019s fear-mongering. The banking sector in India is so solid. It\u2019s over-regulated, just to ensure that if ever anything happens there is enough money to take care (of),\u201d Chauhan said.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Washington, The talk of India\u2019s banking sector plunging into a financial crisis is nothing but \u201cfear-mongering\u201d as the amount of fraud in the Nirav Modi case is equivalent to just three days of interest of the country\u2019s \u201csolid\u201d banking sector, BSE CEO Ashish Chauhan has said here. India\u2019s second-largest state-run lender Punjab National Bank […]<\/p>\n","protected":false},"author":1,"featured_media":27429,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-27428","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/27428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=27428"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/27428\/revisions"}],"predecessor-version":[{"id":27430,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/27428\/revisions\/27430"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/27429"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=27428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=27428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=27428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}