New Delhi: Finance Minister Yashwant Sinha on May 16 said Maharashtra Co-Operative Banks' scam involving Home Trade Ltd and four other brokers was due to "manifestly fraudulent" transactions in government securities and was not reflective of any inadequacy of regulatory guidelines.

"There has been no failure on the part of the regulators as alleged. Detailed guidelines have been laid down by the regulators and violations were detected during inspection and surveillance and prompt action taken," Sinha said making a statement in Rajya Sabha on a calling attention on the securities scam in co-operative banks.

These transactions had come to light in course of regular statutory inspections of Nagpur and Osmanabad District Central Co-operative Banks by NABARD and as a follow up on off-site surveillance/market intelligence reports over urban co-operative banks by RBI, Sinha said.

Further scrutiny revealed absence of any investment policy as per RBI guidelines, non-existence of concurrent audit/internal inspection system, lack of trained staff and complete failure of the management, especially the board of directors in controlling, guiding and monitoring the affairs of the bank and failure to comply with the RBI guidelines, he said.

PTI