CBI has filed a chargesheet against former PNB managing director and CEO Usha Ananthasubramanian in relation to the transactions done by the bank with Nirav Modi
Soon after the Central Bureau of Investigation filed a chargesheet against current and former officials of Punjab National Bank and Allahabad Bank, the Finance Ministry has directed both the banks’ boards to 'divest' these officials of their powers.
The chargesheeted officials include Usha Ananthasubramanian, the CEO and managing director (MD) of Allahabad Bank, and the former chief of PNB.
The investigative agency on Monday filed the chargesheet in relation to the Rs 13,000 crore-plus fraud at PNB allegedly perpetrated by diamantaire Nirav Modi in collusion with officials at the bank.
Rajeev Kumar, Secretary Department of Financial Services (DFS), told reporters that the boards of Allahabad Bank and PNB have been asked to “divest” the concerned officials of all powers.
“We have issued a formal letter to our directors in the board, and since this is in the domain of the board to decide, the boards will take an appropriate decision,” Kumar said.
The investigating agency also filed charges against two current PNB executive directors KV Brahmaji Rao and Sanjiv Sharan, CBI officials told reporters. This chargesheet is only in relation to the case against Modi, the officials added. A separate chargesheet in the second case involving Modi’s uncle Mehul Choksi, promoter of Gitanjali Group, will be filed later.
Rao and Sharan have also been 'divested' of their responsibilities.
According to Kumar, an initial assessment was made by the DFS about 10 days back in which lapses have been found and now the government has sought explanation from the PNB.
At present, the PNB board meet is underway and the government will hear more about the outcome on the case soon.
Ananthasubramanian, who is currently the MD and CEO of Allahabad Bank, headed PNB between August 2015 and May 2017. She was also an executive director at PNB between July 2011 and November 2013, before moving to the Bharatiya Mahila Bank as chairman and MD.
Notably, none of the other PNB chiefs from 2011 and 2017 has been named so far.
On February 14, Punjab National Bank disclosed to stock exchanges that it had filed a formal complaint with the CBI in January end regarding fraudulent transactions worth nearly Rs 11,400 crore.
According to the complaint, some of PNB's employees at its Brady House branch in Mumbai had colluded with representatives from Modi and Choksi's companies to issue fraudulent letters of undertaking through the bank's SWIFT network. Modi and Choksi used the fraudulent LoUs as a form of guarantee to access loans from foreign lenders as well overseas branches of Indian lenders. However, PNB neither have a record of any such LoUs issued, nor did it approve any fund based or non-fund based exposure to Modi's companies.The issue of fraudulent LoUs allegedly started in 2011 and continued over a period of seven years. It was detected only after the bank appointed a new manager in-charge of LoUs at the Brady House branch.