All-out efforts must be made by banks, regulators, Government and India Inc to limit the collateral damage from the alleged fraud in PNB, said the industry body Assocham, cautioning over-reaction by the banks and the investigative agencies would hurt essential credit disbursement to the trade and industry and tamper the growth expectations.
"Following unearthing of the alleged scams and the media headlines, the banks are becoming cautious while there is a perceived public pressure on the regulators to act tough.
Given the scale of the problem, the level of noise may be justified, but it could cause a huge loss of confidence.
So, it is time to show immense restraint and use the adverse situation as an opportunity to fix the systemic issues," said Assocham Secretary General D S Rawat.
The chamber said,''We can learn a lot from the US experience of handling the global financial crisis of 2007-08. (UNI)