Ms.Prachiti Suri, B.B.A. L.L.B (Hons), NMIMS Indore
Dr. Ankita Doneriya, Faculty, NMIMS Indore.
ABSTRACT
The greatest financial fraud in Indian history, the Punjab National Bank Scam, has highlightedthe need for new regulatory and corporate governance measures in the country's public sector banks. The PNB scandal dealt a devastating blow to the entire banking industry and effectivelyput an end to business as usual. More than four banks were engaged in this 11,700-crore scandal, which raises serious concerns about the stability of banks' finances. Nearly five yearshad passed since this fraud went undetected. The PNB scandal was a major setback for the whole banking industry when government was looking for bank recapitalization. The PNB scam has had an enormous scope that has been ongoing for more than five years without beingnoticed. This raised important concerns about both the bank's internal procedures and governmental legislation. The nation's central bank, the RBI, received criticism from the general population for failing to recognise the biggest banking fraud. This paper seeks to pinpoint and examine the causes of this gigantic fraud. This paper will examine the involvement of the bank in the fraud along with any potential loopholes and effects of scams on different banks as well as on economy. The study also throws some light on the challenges faced in the banking sector followed by the recommendations.
Keywords: PNB, scam, RBI, audit, govt regulation, challenges, recommendations
