PNB fraud: MoF initiates action against Allahabad Bank CEO Usha Ananthasubramanian

PNB fraud: MoF initiates action against Allahabad Bank CEO Usha Ananthasubramanian

Investigators on Monday filed a chargesheet in special CBI court against senior banking officials, who were earlier booked for alleged involvement in the Rs 13,600 crore fraud conducted by fugitive diamantaires Nirav Modi and Mehul Choksi, reported news agency Reuters.

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.

PNB executive directors Brahmaji Rao and Sanji Saran, and general manager Nehal Ahad will also be charged.

The government has initiated action for removal of Allahabad Bank CEO Usha Ananthasubramanian following the CBI chargesheet in the $2 billion PNB fraud detailing her role.

The finance ministry has also asked the PNB board to divest two executive directors of all powers, financial services secretary Rajiv Kumar told reporters.

The scam pertains to the alleged issuance of fraudulent Letters of Undertakings of more than Dollars 2 billion to companies of Modi and his uncle Mehul Choksi by the Punjab National Bank's Brady House branch in Mumbai during 2011-17, officials said.

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"There is a set process for removal and dismissal of directors from the board of banks and that has been initiated", Kumar said. However, The role of Mehul Choksi in the present chargesheet has not been detailed by the CBI.

In a stock exchange filing, Allahabad Bank said it has convened a meeting of the Board of Directors on May 15 to discuss the matter, adding that it has not received any "formal communication" from the ministry. "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.

The officials said Nirav Modi and Nishal were beneficiaries of the fraud, authorised signatories, and in the know of the whole scam. So this is a clear message that we have to be responsible for what we do.

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.

The agency also made it clear that the naming of Ananthasubramanian in the charge sheet does not mean that her predecessors have been given clean chit as the investigation is going on, they said.

When asked about action against two MDs named in the FIR related to loans given to Aircel by IDBI Bank, he said, "I would like to make it clear that you can not take action only on hearsay". 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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