Urjit Patel is right: But Reserve Bank of India should introspect as well

Mr Patel has pointed out that incentives for PSBs are skewed by a combination of preferential regulation and their particular governance structure

The recent scandal about fraudulent letters of undertaking (LoUs) has once again brought into the public eye the question of governance and regulation of public sector banks (PSBs). There has been considerable criticism of the banking regulator, the Reserve Bank of India (RBI), for failing to put in place mechanisms to ensure that bank processes are not subverted in the manner that they appear to have been in the Nirav Modi case. There is some merit in this as the central bank should look into why it did not conduct a follow-up audit after issuing directions to banks to link