PNB fraud may lead to tightening of norms for raising capital: PHDCCI

Punjab National Bank | ICRA revised rating on bank's Basel III Compliant Tier II bonds to AA (hyb) (Stable) from AA- (hyb) (Stable). (Image: PTI)

Industry body PHDCCI president Anil Khaitan today expressed concern over the crisis triggered in the banking industry post PNB episode and said the current situation may lead to unnecessary tightening of norms and procedures in raising capital from banks.

Khaitan further said he is surprised how the banks internal audit system failed to detect anomalies in transactions leading to the alleged fraudulent loans given out to the borrowers.

"The current situation is worrying for Indian industry since it may lead to unnecessary tightening of norms and procedures in raising capital from banks.

"This will in turn hurt the positive sentiment generated in ease of doing business and can potentially gravelly impact the policy," he told reporters here.

Khaitan also said that instead of making changes in the loan seeking mechanism, stringent steps should be taken by the Central Bank to strengthen the bank's internal audit procedures.