Published: Tue, May 15, 2018
Finance | By Claude Patterson

PNB fraud: CBI submits charge-sheet in special court

PNB fraud: CBI submits charge-sheet in special court

The CBI accused former PNB boss Usha Ananthasubramanian, now the chief executive of Allahabad Bank, in the first batch of formal charges to be filed in the case, the two CBI sources said.

This move came on the heels of the Finance Ministry writing a letter to the PNB suggesting "appropriate decision", a PNB spokesperson said.

The Central Bureau of Investigation (CBI) filed its first charge sheet on Monday against the former Managing Director and Chief executive of Punjab National Bank (PNB), Usha Ananthasubramaniam and several others for the alleged almost $ 2bn PNB scam by businessman Nirav Modi.

Ananthasubramanian was the MD and CEO of PNB from 2015 to 2017 - a period mired in controversy because of the scam- and was questioned recently by the in connection with the case.

The federal government owns controlling stakes in state-run lenders including Allahabad Bank and PNB. "This was essentially because of the fact that SWIFT and CBS integration was to take place based on the circular issued by RBI in 2016", Kumar said. The sources confirmed to PTI that the Allahabad Bank board is likely to meet in a day or two.

The RBI having regard to the bank's CRAR and leverage ratio position has advised certain additional actions, Allahabad Bank said in a filing on stock exchanges.

They said PNB executive directors K.V. Brahmaji Rao and Sanjiv Sharan were also named on the charge sheet filed in a Mumbai court, and the officials were accused of breaching central bank guidelines.

Punjab National Bank, which is at the centre of a near Rs 13,000 crore fraud involving jewellers Nirav Modi and Mehul Choksi, is set to report a loss of Rs 3,908.6 crore for the fourth quarter ending March 2018, as per Reuters poll estimates.

The financial services secretary said a show cause notice was issued to them about 10 days ago by the ministry.

He said the exposure of the banking sector to the gems and jewellery sector was huge and the RBI should have taken necessary action as the sector was not a priority sector.

"While we have recovered documents including original applications for seeking loan through LoUs of over 130 of the 144 LoUs mentioned in the first FIR, the charge sheet concentrates only on half-a-dozen LoUs and an equal number of FLCs as we have been able to collect evidence to prove that they were fraudulent", said an official".

On a related note, the CBI today submitted a charge-sheet in a Special CBI Court in Maharashtra's Mumbai city in connection with the multi-crore scam. All government directors and nominees have been asked to attend bank board meetings and all ED and MD-level vacancies have been forwarded to the Banks Board Bureau.

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