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Risk Review Report on Indian Banking Sector by Alea Consulting | ||
New Delhi, Delhi, India Alea Consulting has come up with a risk review report on Indian Banking Sector. The Indian banking system emerged safe out of the credit crisis of 2008-09, however, the relief was short-lived as Indian banks are swamped by two major challenges - bank frauds and NPA crises leading to stressed balance-sheets at these banks. The Nirav Modi - Punjab National Bank (PNB) scam (US$2 billion) is deemed to be the biggest banking fraud in the history of India and more such are getting exposed.
Key Statistics
Initiatives Strengthening the Legal Framework
Re-Capitalisation Plan
Improving Practices
Way Forward Banking reforms such as IBC, 2016 and bank recapitalization will be ineffective unless governance standards are improved. A comparison with recommendations of PJ Nayak Committee Report suggests that the extent of capitalization in the PSBs is not sufficient to overcome the problem of NPAs and to achieve Basel–III levels of Tier-I capital. There is a need to tighten the system to bring in more transparency and accountability. Higher FDI limits will not change things materially for the state-owned banks, unless the government is able to bring in long-term strategic investors.
Greater usage of data analytics can help make bank policies more effective. A system of continually and repeatedly advising customers must be created so that customers can be protected from electronic banking and payments related fraud.
About Alea Alea is a global risk mitigation and investigative consulting firm, which helps organizations reduce reputation and operational concerns. The firm has conducted significant assignments for international organizations and industries including banking, education, EPC, financial services, healthcare & diagnostics, hotels, infrastructure, insurance, logistics, manufacturing, mining, pharmaceutical, power, real estate, renewable energy, retail and telecom.
Alea’s risk mitigation services include: senior employee background checks, KYC/AML checks, corporate intelligence, investigative monitoring, asset searches, intellectual property protection, crisis management response, insurance & fraud investigations, litigation support and due diligence of business partners. |
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