New Delhi [India] Feb 23 (ANI): Finance Ministry has written to Hong Kong branches of four Indian banks that received letters of undertaking (LoUs) from Punjab National Bank (PNB), said sources on Friday.
"The Finance Ministry has written to Hong Kong branches of the State Bank of India, Axis Bank, Allahabad Bank and Bank of India that got letters of undertaking (LoUs) from the PNB and told them to reconcile accounts and check for irregularities," said sources.
LoU is an undertaking provided by one bank to another bank, in favour of or on behalf of a customer.
The Finance Ministry has also directed all banks to reconcile issued LOUs, the sources added.
The Ministry has also put several regulatory measures in place.
"The public sector banks have also been directed to appoint special representative or agency to monitor all loans that exceed Rs. 250 crore," the sources informed.
The ministry has also issued guidelines for consortium financing and said that only seven banks can be in a consortium.
Till now, there was no cap on the number of banks in a consortium.
Under consortium financing, several banks fund a borrower with a common appraisal, common documentation, joint supervision and follow-up exercises. (ANI)