On a related note, the CBI today submitted a charge-sheet in a Special CBI Court in Maharashtra's Mumbai city in connection with the multi-crore scam.
Hours after the CBI filed the chargesheet against the fraudstars, the DFS (Department of Financial Services) has directed the directors of PNB and Allahabad Bank to divest all the powers of the officers, who are accused in the case. Usha Ananthasubramaniam, who was the MD and the CEO of the PNB bank is also expected to be included in the charge sheet. Ananthasubramanian may also meet the same fate; Allahabad Bank has informed investors that it has called for a board meeting on May 15 to take up the issue. She is accused of not complying with a 2016 circular of the Reserve Bank of India on the Swift (Society for Worldwide Inter-bank Financial Telecommunications) system.
NEW DELHI: Allahabad Bank will hold its board meeting on Tuesday after the Finance Ministry's direction to take away all the powers of its MD and CEO Usha Ananthasubramanian. The agency has said bank officials have been charged under anti-corruption laws because their acts led to loss to exchequer, corresponding gains to Modi and his companies and "criminal breach of trust" to the public. Currently, she is also head of the Indian Banks' Association, an industry body for the lenders.
The PNB board has made a decision to remove the EDs named in the CBI chargesheet in an emergency meeting on the insistence from the government's nominee director.
Diamantaire Nirav Modi is accused of allegedly defrauding the Punjab National Bank of Rs 6,498 crore, allegedly by raising credit from overseas branches of other Indian banks by using illegal guarantees with the help of several top-level PNB officials.
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The ED had registered the money laundering case against Nirav and others on the basis of a CBI FIR.
CBI officials said the chargesheet names Nirav Modi and his brother Nishal in connection with the issuance of Letters of Undertaking totalling Rs 6,498.20 crore during 2011-17. "We issued notices and sought explantation 10 days back from top officials of these banks", he said. Ananthasubramanian was the CMD of Punjab National Bank till May 2017.
Since February, PNB has been at the centre of a near Rs 13,000 crore fraud involving diamond merchants Nirav Modi and Mehul Choksi.
So far, 19 people have been arrested in the case. 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.