Healthy business practices and avoiding recklessness can keep our banking sector robust and relevant
The government recently approved setting up of an independent regulator—the National Financial Reporting Authority (NFRA)—which will have sweeping powers to act against erring auditors. It did so in the wake of the recent fraud detected at the Punjab National Bank. NFRA will regulate the auditors who keep an eye on the actions of bank employees who, in turn, are the custodians of your bank deposits. NFRA will be one more addition to the pantheon of regulators for banking. However, while this may help earlier detection of fraud-based cases, there are other areas to be considered to prevent future crises in banks.