Reserve Bank of India Governor Urjit Patel on Wednesday defended the regulator saying it has “very limited authority” to hold state-run banks accountable. Patel suggested a levelling of the playing field between public sector and private sector banks.

Patel said it was infeasible for the RBI to be in “every nook and corner of banking activity” to avoid frauds. He said the state-run banks are regulated by the RBI as well as the government, which owns majority stakes in them. This has led to the system of “dual regulation” and this “fault line is bound to lead to tremors such as the most recent fraud”, he said, according to Reuters.

“Legal reforms are highly desirable to empower the RBI to fully exercise same responsibilities that apply for public sector banks to private banks as well,” Business Standard quoting Patel as saying at law university in Gujarat. “Legal reforms are also desirable to empower RBI to ensure a level playing field in supervisory enforcement.”

Without naming the Punjab National Bank, Patel said, “We at Reserve Bank also feel anger, hurt and pain at banking sector frauds and irregularities,” he said, according to The Indian Express. “Banking frauds amount to looting of our country’s future by some in the business community [who are] in cahoots with some lenders.”

Businessmen Nirav Modi and Mehul Choksi are accused of defrauding Punjab National Bank of Rs 13,645 crore.

On March 14, the Reserve Bank of India discontinued Letters of Undertaking or LoUs and Letters of Comfort with regard to trade credits for imports with immediate effect.