Public sector enterprises and state-run lenders need to focus on strengthening fraud prevention mechanism and risk management policies in the wake of the recent banking fraud, SCOPE Chairman Ved Prakash said today.
He noted that corrective measures are being taken by the government to plug the loopholes.
“Sometimes it becomes very difficult to stop a fraud by an individual or by a group of people. I think that is one major area where all PSUs and banks have to focus on fraud prevention and risk management policy,” the chairman of the apex body of PSEs said at a press conference here.
Prakash said the role and responsibility of independent directors have been considerably enhanced to prevent bank frauds to some extent.
When asked about the proposed merger of trading firms MMTC and STC, Prakash, who is also the MMTC CMD said: “We do not have any definite information from the government on this.” However, he added that pooling of resources of the two firms shall definitely reduce the cost and increase efficiency.
“Definitely it (merger) is a move in the right direction but when it happens, how it happens that the government will be working out,” he said.
Sharing views on the dividend policy for PSUs framed by the government, Prakash said the government wants PSUs having sizeable profits to invest in infrastructure projects, undertake buy-back of shares or invest in government schemes so that the surplus funds can be put to good use.
Regarding ownership and corporate governance, he said government’s initiative involving merger of various entities like insurance companies, banks or similar PSUs and list them on “our exchange is a very good step”.
Prakash said merger of entities and their resources increases their efficiency and reduces the cost. Moreover, the bigger company post merger can grow and survive in the global onslaught of competition which may not be possible otherwise.
He said various initiatives have been taken on corporate governance and autonomy, and more powers given to PSU Boards so that they need not refer every decision to the government.
Prakash was here to launch the SCOPE YouTube channel.
“The basic objective of the channel is to highlight the performance of PSUs and also provide( a platform) to the respective PSUs by projecting their image, vision, strategy and overall achievements,” he said.
Prakash said the channel would showcase innovative practices being followed in some PSUs so that they can be emulated by other state-owned firms for development and growth of the country’s public sector.
“The channel would bring out various informative videos about PSEs. It will highlight the performance, initiatives of the public sector, national economy, achievement and contribution of members,” he said.moneycontrol