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Politics

Cleaning up the mess at India's state banks

Troubled institutions need autonomy and better loan monitoring more than privatization

| India

India's stock market investors and the general public have been outraged by a series of cases of alleged loan fraud at state-owned banks. In the most prominent, Punjab National Bank is alleged to have been defrauded of 130 billion rupees ($2 billion), mainly by companies associated with celebrity jeweler Nirav Modi and his uncle Mehul Choksi.

The PNB case is being investigated by India's Central Bureau of Investigation, as are separate allegations of a 37 billion rupee fraud involving Vikram Kothari, the owner of penmaker Rotomac Global, and a consortium of state-owned banks led by Bank of India and Bank of Baroda.

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