Punjab National Bank Scam and Allahabad Bank CEO
Punjab National Bank Scam and Allahabad Bank CEO
PALAK RATWANI
BACKGROUND:
The recent star case relates to a fraudulent letter of undertaking issued by PNB at its branch in Fort, Mumbai. The Punjab National Bank Scam is regarded as a “Criminal Conspiracy” organised by a jeweller and designer Nirav Modi and Mehul Choksi along with PNB officials and employees. All the directors of Nirav Modi’s and Mehul Choksi’s, employees and official of PNB have been named in the chargesheet by CBI.
list for the following:
- Criminal
Conspiracy - Criminal Breach
of Trust - Cheating
- Dishonesty
- Corruption
Money Laundering
Following are the contentions in Punjab National Bank in order to hide its allegations:
- After the scam broke open the bank initially contended that two of its employees named Gokul Nath Shetty and the other was the retired deputy manager of the bank were involved in the scam and they fraudulently issued the Letter of Understanding (LOU) to foreign branches of Allahabad Bank, Axis Bank and Union Bank Of India with the help of SWIFT.
- In further proceedings of CBI, PNB alleged the associates of three firms namely Diamond R US, M/s Solar Exports and M/s Stellar Diamonds who requested PNB for issuing LoUs with the purpose of making payment to foreign suppliers.
- It was then, the Bank demanded a cash margin of 100% for such issue of Letter of Understanding.
- In further CBI investigation, the owners of the three firms contested that they received the letter without any aforesaid condition.
- With the opening of transaction history, PNB was suspected fraud. Therefore, In order to save itself from further investigations , PNB registered a complaint with CBI, alleging that Nirav Modi, Ami Modi, Nishal Modi and Mehul Choksi along with two PNB officials were cheating against PNB .
- The recent updates have now portrayed Key Officials such as Usha Ananthasubramanian, former CEO of PNB and current CEO of Allahabad Bank, KV Brahmaji Rao and Sanjiv Sharan, the Executive Directors of PNB in the chargesheet. They have been alleged of failure in implementing several circular and caution notices issued by RBI regarding the SWIFT messages and improvement of Core Banking Systems.
CURRENT ISSUE:
Following are the charges alleged on Usha Ananthasubramanian in Punjab National Bank Scam :
- Section 409 of
The Indian Penal Code (IPC) for Criminal Breach of Trust - Section 420 of
IPC for Cheating. - Section 13(2)
of the Prevention of Corruption Act for causing wrongful losses to the banks
and Criminal breach of trust to the Public.
the Government had issued notice to these officials 10 days ago after getting
information from the investigation agencies. This is the first step to initiate
their removal under Section 8 of The Bank Nationalisation Act.
One of the reports said – “Ananthasubramanian’s held the post from
2015-2017. Her role being under the scanner does not mean others, who held the
post from 2011-2017, will not to be probed.”
CONCLUSION:
The reasons why Ananthasubramanian’s name reflected in the Charge sheet are as follows:
- It was frequently observed that she had overlooked repeated warnings about a similar modus operandi and official under her sent a false report to RBI about due compliance with the Central Bank circulars.
- The CBI investigation also observed that in the year 2016, a similar scam at Indian Overseas Bank in Chandigarh took place which involved the PNB branch in Dubai, issuing Letter of Understandings.
- The officials also remarked that RBI had issued certain cautious circulars in 2016 regarding protection of SWIFT operations which was not duly complied the senior officials of PNB.
- It later presented false facts and data position to RBI with regards to SWIFT operations.
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