Technology, better supervision needed to tackle banking malpractices: CII

NEW DELHI, FEBRUARY 25

A twin strategy of better monitoring and supervision of banks and spreading the best corporate governance standards could help tackle financial frauds such as the one uncovered recently in Punjab National Bank, the Confederation of Indian Industry (CII) said on Sunday.

“Government, regulators and industry must act fast to address systemic risks in the financial sector. The three key solutions for the banking sector are better management and operational efficiencies, use of technology such as blockchain and big data analytics, and lowering Government shareholding in public sector banks,” said CII President Shobana Kamineni in a release here. “Such financial malfeasance perpetrated by a collusion of unethical business entities and corrupt officials should not lead to a situation where funds to industry get choked,” she said.

Technological advances can be a major enabler for ensuring monitoring of transactions that are subject to financial fraud and risks. Some banks are already deploying artificial intelligence, big data and blockchain technologies to better regulate their operations. It is important to minimise human interface in such transactions to lower the risk of misdemeanours, the release said.

Stressing the need for consolidating public sector banks into a few strong banks, she said the government could consider bringing down its stakes so that expert management practices and greater accountability can be brought in