Massive net loss worth Rs 13417 for scam hit PNB in Q4

CBI is probing the role of other officers in the PNB fraud case

Interestingly, in their independent auditors' report, the statutory auditors, without qualifying their opinion, have drawn attention to the notes to the accounts as regards the bank's accounting treatment of provisions relating to the frauds involving "certain accounts in gems & jewellery sector".

The CBI today filed its first chargesheet in the country's largest financial scam worth over Dollars 2 billion at PNB allegedly committed by billionaire jeweller Nirav Modi.

The CBI has also booked former IDBI CMD Kishor Kharat, at present MD and CEO of Indian Bank, in the loan fraud case. The PNB board convened an emergency meeting on Monday on the insistence from the government's nominee director.

"Their capital is very low, and a bank needs it to sustain growth", said Yuvraj Choudhary, an analyst at Mumbai brokerage Anand Rathi, who said PNB's reported loss was more than triple his estimate, calling it a "major concern". The bank has been conducting a separate internal investigation into the fraud and has already suspended at least 21 officials. The charge sheet has been filed under sections of cheating and conspiracy of the Indian Penal Code and relevant sections of the Prevention of Corruption Act, 1988.

Senior officials of PNB did not implement the circulars and caution notices issued by Reserve Bank of India regarding safeguarding SWIFT operation through which messages were sent to overseas banks to issue loans to the companies of Nirav Modi, they said. The duo have denied the allegations against them, and authorities have said they both left the country before the fraud was uncovered. Moreover, these were not accounted in the bank's core banking system. "They misinterpreted the directives", a CBI officer said. "In fact, it is also believed that it was communicated to the central bank that all was well at PNB with regards to SWIFT", a former PNB bank executive told Quartz.

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. Currently, she is also head of the Indian Banks' Association, an industry body for the lenders.

"PNB scam case: Central Bureau of Investigation submitted charge-sheet in Special CBI Court in Mumbai", the news agency ANI reported. "However, it is negligence and not fraud but action needs to be taken to show that someone is accountable", said Ashvin Parekh, who runs Ashvin Parekh Advisory Services, a consultancy firm. The fraud was allegedly perpetrated despite the circulars issued by RBI, which was in the knowledge of senior officials of PNB.

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