PNB fraud: Govt initiates process to remove bank officials named in CBI chargesheet

The finance ministry on Monday initiated the process of removing top bank officials named by the Central Bureau of Investigation in its chargesheet over the Rs13,000-crore Punjab National Bank fraud case involving jewellers Nirav Modi and Mehul Choksi as accused.

Former managing director of PNB and the current MD of Allahabad Bank, Usha Ananthasubramanian, and two PNB executive directors — Sanjeev Sharan and KV Brahmaji Rao — have been named in the chargesheet that was filed in a special Mumbai court on Monday.

“The government has initiated the process of removal of the senior management of banks who have been named in the chargesheet,” said Rajiv Kumar, secretary, department of financial services.

“In the meantime, the government has instructed the government nominees to move board resolutions seeking divesting their responsibilities.”

While the PNB board met on Monday and approved the government director’s resolution to take away the responsibilities of the two executive directors, the board of the Allahabad Bank will meet soon after an emergency meeting was called by the government nominee, according to sources. The government had issued a notice to the officials 10 days back after receiving information from the investigating agencies.

This is the first step to initiate their removal under Section 8 of the Nationalised Banks Act.

Calls and messages to Ananthasubramanian remained unanswered, while Sharan declined to comment on the issue. Messages left for Rao with his office remained also unanswered.

Ananthasubramanian, who was the MD and CEO of PNB from August 2015 to May 2017, was questioned by the
CBI in February in connection with the case.

Jeweller Modi allegedly used fake letter of undertaking to defraud PNB of over ₹13,000 crore in connivance with bank officials by exploiting the loophole of non-integration of SWIFT with the Core Banking System.

The CBI has filed a chargesheet against Ananthasubramanian and 21 others, including 11 bank officials, over the PNB fraud case. So far, 19 people have been arrested in the case while Modi and Choksi are on the run.