'Divest powers of accused,' Finance Ministry directs PNB, Allahabad bank

CBI names AllBank CEO Usha in PNB fraud case

CBI names AllBank CEO Usha in PNB fraud case

The agency filed the chargesheet before a special Central Bureau of Investigation (CBI) court here.

Rajeev Kumar, Secretary, Department of Financial Services (DFS), Ministry of Finance on Monday said that they have instructed the directors of the Punjab National Bank (PNB) and the Allahabad bank to divest all the powers of those who are accused in the multi-crore PNB scam. Around 10 days ago we had asked explanations from the two executive directors at the PNB and the current MD and CEO in Allahabad Bank.

PNB executive directors Brahmaji Rao and Sanji Saran, and general manager Nehal Ahad will also be charged. She has been named by the CBI in the charge sheet relating to the Rs 14,000 crore-plus fraud at PNB unearthed in mid-February.

The move comes after Ms. AnanthaSubramanian was named in the CBI chargesheet, along with 21 others in the Nirav Modi scam. Other top executives at PNB, who served between 2011 and 2017, the period when the fraud was perpetrated, reportedly may also come under the CBI's scanner. The chargesheet, however, did not name Nirav's wife Ami and his uncle and business partner Mehul Choksi.

After the IOB fraud had surfaced, the RBI had issued guidelines and circulars to prevent such frauds in the banks which were allegedly not implemented in PNB in its entirety, they said.

Provisions rose almost four-fold to Rs20,353 crore from Rs4,466 crore in the year ago period, on account of rising bad debt, the bank's stock exchange filing showed.

Shares in Allahabad Bank closed 3.4 percent lower on Monday, while those in PNB ended slightly higher on the day.

The officials said supplementary charge sheets will have information from foreign governments, shell companies, foreign banks, and detail the role of officials posted in foreign branches of Indian banks which issued credits to Modi's firms on the basis of PNB LoUs etc.

The CBI had filed three FIRs between January and March to probe the PNB fraud.

The role of bank's former chief Usha Ananthasubramanian has been detailed in the chargesheet.

PNB had reported a Rs 143.5 billion fraud in January, wherein a few of its employees had issued letters of undertaking, in collaboration of Nirav and Mehul firms, in an unauthorised manner.

So far, 19 people have been arrested in the case while Modi and Choksi are on the run. PNB's earnings will be pressurised as it will have to make enough provisions to deal with the scam-related payouts to other banks. "Reconciliation of SWIFT (Society for Worldwide Inter-Bank Financial Telecommunication) messaging system CBS was not done despite repeated caution notices of the RBI", a CBI official said.

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