PNB scam: CBI to file chargesheet against several senior bankers

Nirav Modi

Protesters burning a print-out of Nirav Modi's face

Besides the three board level officers, the CBI chargesheet, filed in a special court in Mumbai, names PNB's general manager (international operations) Nehal Ahad.

Rajiv Kumar, Secretary, Dept Financial Services (DFS) told media-persons, "PNB board meeting is underway, they will announce the action taken after the meeting".

Trouble is mounting for India's top banker Usha Ananthasubramanian who is now the CEO and MD of Allahabad Bank.

Under instructions from the finance ministry to act on India's largest ever bank scam involving diamond merchants Nirav Modi and Mehul Choksi, the PNB board divested its executive directors K V Brahmaji Rao and Sanjiv Sharan of their financial and executive powers.

The CBI filed the charge sheet for alleged criminal conspiracy, cheating, forgery and provisions of Prevention of Corruption Act. "She along with other bank officials has been named in the chargesheet as they could not give satisfactory replies in regard to the case during questioning by the agency", the CBI added.

Usha, who served in PNB from August 2015 to 2017 has been named as an accused in this case.

The main accused in the scam - Nirav Modi and his brother Nishal Modi - are absconding. "Similarly, the degree of due diligence addressed by a top banker would be best understood by the banking regulator", they said.

The ED had registered the money laundering case against Nirav and others on the basis of a CBI FIR.

Both Modi and Choksi had left the country before PNB filed the complaint with the CBI.

Companies owned by Nirav Modi and Choksi of Gitanjali gems availed loans from worldwide branches of other banks based on letters of undertaking (LoU) issued by several PNB employees.

The scam, which reportedly began in 2011, was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies.

PNB's losses could have been much higher, had the Reserve Bank of India (RBI) not given some relaxations to the Delhi-based public sector bank for spreading its liabilities related to the fraud and wage bills.

"After including outstanding amounts under other credit facilities to the above entities, the amount involved now works out to be Rs 14,356.84 crore", PNB said. "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. According to the chargesheet, the reconciliation of SWIFT system and Core Banking System, which enables inter-connectivity between branches and real-time updation of transactions, was not done despite reminders by the RBI.

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