Gandhinagar: Expressing deep anguish over a spate of banking frauds, RBI Governor Urjit Patel said on Wednesday that like the 'Neelakantha', the central bank will consume poison and face brickbats, but will persist with endeavour to become better with each trial.
Breaking silence over the Rs 12,967 crore scam at PNB, he said: "I have chosen to speak today to convey that we at the Reserve Bank of India also feel the anger, hurt and pain at the banking sector frauds and irregularities."
Delivering a lecture at the Gujarat National Law University here, he said: "In plain simple English, these practices amount to a looting of our country's future by some in the business community, in cahoots with some lenders."
Patel said RBI has in place asset quality review of banks and "we are doing all we can to break this unholy nexus".
Invoking mythology, he said RBI has undertaken the cleaning up of the country's credit culture as the Mandara mount or the churning rod in the Amrit Manthan or the Samudra Manthan of the modern day Indian economy.
Until the churn is complete and the nectar of stability safely secured for the country's future, someone must consume the poison that emanates along the way, he said.
"If we need to face the brickbats and be the Neelakantha consuming this poison, we will do so as our duty; we will persist with our endeavours and get better with each trial and tribulation along the way," the Governor said.
He also wished that more promoters and banks, individually or collectively through their industry bodies, would reconsider being on the side of "Devas rather than Asuras in this Amrit Manthan".
He made a pitch for "making banking regulatory powers neutral to bank ownership and leveling the playing field between public sector and private sector banks".
Observing that there has been a tendency in the pronouncements post revelation of the fraud that RBI supervision team should have caught it, Patel said no banking regulator can catch or prevent all frauds.
"While that can always be said ex post with any fraud, it is simply infeasible for a banking regulator to be in every nook and corner of banking activity to rule out frauds by 'being there'," he said.
Referring to PNB, Patel said the RBI had identified, based on cyber risk considerations, the exact source of operational hazard through which "we understand" now the fraud had been perpetrated.
In particular, he said the RBI had issued precise instructions via three circulars in 2016 to enable banks to eliminate the hazard.