PNB posts net loss of Rs 13417 crore for Q4

Nirav Modi

Nirav Modi

CBI filed the chargesheet in a Mumbai court just before the 90-day period to file charges against those arrested ends.

Briefing reporters, financial services secretary Rajiv Kumar said there is a set process for removal and dismissal of directors from the board of banks and that has been initiated.

The board of Allahabad Bank, which met on Tuesday, made a decision to strip the the function of its chief executive officer and managing director Usha AnanthaSubramanian, the bank informed the exchanges.

All these files were processed by Ananthasubramanian and three other top officers - Rao, Sharan and Ahad, which shows they were completely aware of the modus operandi of such frauds being perpetrated, they said.

Giving details of the charges against Ananthasubramanian, the agency sources said she was the MD and CEO of PNB when a similar case of LoU fraud was reported from Indian Overseas Bank, Chandigarh in 2016 where credits were issued by PNB's Dubai branch on the basis of these guarantees. The duo have denied the allegations against them, and authorities have said they both left the country before the fraud was uncovered. This is the first charge sheet that has been filed against the absconding jeweller since the CBI and ED registered cases against him. A source familiar with the matter said more people are likely to be charged later this week.

It has also detailed the roles of Nirav Modi, his brother Nishal Modi and Subhash Parab, an executive in Nirav Modi's company.

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She took charge of PNB at a time when the bank was struggling under a heap of bad loans while being under the RBI's scrutiny for deterioration in asset quality.

Two jewellers, Nirav Modi and Mehul Choksi linked fraud of over Rs 14,000 crore has reflected in the earnings of Punjab National Bank in a very disappointing manner.

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

PNB was allegedly defrauded by some of its branch level employees who in connivance with Nirav Modi had issued letters of undertaking without following the bank's prescribed procedures since 2011 which ballooned into a big scam.

The bank's share value declined by 6.10% to Rs 83.85 per share after the announcement of its quarterly results. However, these were not accounted in the bank's core banking system.

PNB has also created liability in its books for dues amount to Rs 69.6 billion, in respect of the liabilities related to the other LoUs. "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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