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

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

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

"Usha Ananthasubramanian, MD & CEO be divested of all functional responsibilities of the Bank with immediate effect and the Government of India, Ministry of Finance, Department of Financial Services be requested to make suitable arrangements for smooth functioning of the Bank", the bank said. Around 10 days ago we had asked explanations from the two executive directors at the PNB and the current MD and CEO in Allahabad Bank.

Following the government's directive, which came within hours of CBI filing a chargesheet in the country's biggest banking fraud case, the PNB board divested its two executive directors, K V Brahmaji Rao and Sanjiv Sharan, of all financial and executive powers.

They said that a separate chargesheet in the second case involving Choksi will be filed later. The chargesheet also made accused three companies namely Diamond R US, Solar exports and Stellar Diamonds of Nirav Modi.

Ananthasubramanian (57), was at the helm of PNB from August 2015 to May 2017 after serving as its Executive Director from July 2011 to November 2013. Vipul Ambani, CFO of Firestar International, the flagship of Nirav Modi's global business, was allegedly aware of the illegalities and kept all the related documents with him. The duo have denied the allegations against them, and authorities said they both left the country before the fraud was uncovered. Hence, the top brass of PNB had complete knowledge of the methods involved by fraudsters to cheat the banks using LoUs, sources said.

The chargesheet filed on Monday is based on CBI's FIR registered on January 31 against Nirav Modi, his wife Ami, brother Nishal, and uncle Choksi, among others.

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The agency has not given in detail the role of Mehul Choksi in the present chargesheet.

It is alleged that Modi and Choksi, in connivance with the then PNB deputy manager Gokulnath Shetty, transgressed banking procedures and fraudulently caused PNB "wrongful" loss.

Group firms of Modi and Choksi secured loans from global branches of other banks based on letters of undertaking (LoU) issued by employees of PNB.

"Senior officials of the PNB did not implement Reserve Bank of India (RBI) circulars on the matter and misrepresented the facts". Chartered Accountant Subhash Kumar Rambia has also been charged with not mentioning loans of Rs 1,700 crore taken by each of the three accused companies in their books, it said.

As a result, provisions for the bad loans jumped four-fold to Rs 16,202.82 crore for the quarter under review compared to Rs 4,910.39 crore parked aside in the same period a year ago.

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