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PNB scam: CBI to file chargesheet against several senior bankers

PNB scam: CBI to file chargesheet against several senior bankers

In a filing to BSE stock exchange, PNB said, "In view of the recent developments, the board of the bank in its meeting made a decision to divest the functional powers of executive directors, K V Brahmaiji Rao and Sanjiv Sharan and sought their replacement from the Department of Financial Services".

A second charge sheet involving Nirav Modi's uncle Mehul Choksi of Gitanjali Gems will be submitted this week, the public prosecutor said during the submission of the first charge sheet. The government also initiated the removal process of former boss of the beleaguered public-sector bank, Usha Ananthasubramanian, who is now the managing director and CEO of Allahabad Bank. Usha Ananthasubramaniam, who was the MD and the CEO of the PNB bank is also expected to be included in the charge sheet.

One of the sources said K.V. Brahmaji Rao and Sanjiv Sharan, both executive directors at PNB, were also named, marking the first batch of formal charges to be filed in the $2 billion fraud case. "In the meantime, the bank has convened a meeting of its Board of Directors on May 15 to discuss the matter", the lender said in a regulatory filing. The two PNB executives, Ananthasubramanian and Allahabad Bank did not respond to requests seeking comment. PNB issued a total of 1590 LoUs to group firms of the two businessmen since 2011 and had also announced in March that it will honour all these LoUs. "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.

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The chargesheet, filed in a Mumbai court, detailed the alleged role of the PNB's former chief Usha Ananthasubramanian.

At the heart of the PNB fraud was the Society for Worldwide Interbank Financial Telecommunications (SWIFT) messaging system, which is used by banks worldwide to enable cross-border transactions. PNB's earnings will be pressurised as it will have to make enough provisions to deal with the scam-related payouts to other banks. Disciplinary actions were initiated under Section 8 of Bank Nationalisation Act and we will take strong action if wrongdoing is found against management of banks. Regarding the case, All of them are questioned by the CBI.

The Financial Services Secretary further said a show cause notice was issued to them about 10-days back by the ministry. The stock exchanges had asked a query from the bank asking if its CEO was charged by CBI in the PNB fraud.


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