A special CBI court in Mumbai granted bail on Monday to Usha Ananthasubramanian, former managing director and CEO of Allahabad bank, in connection with the Rs 140-billion fraud at the Punjab National Bank (PNB).
Earlier this month, the court had taken cognisance of the sanction granted by the President to prosecute Ananthasubramanian in the case.
As per the procedure, when a court takes cognisance of the sanction, summons are issued to the accused to appear before the court.
Thereafter, the accused can move a bail application.
Accordingly, Ananthasubramanian appeared before special judge J C Jagdale and applied for bail, which was granted by the court.
The government had dismissed Ananathasubramanian on August 14.
Three months ago, she was divested of her powers as MD and CEO of the Allahabad Bank following the country's biggest bank fraud allegedly carried out by diamond jeweller Nirav Modi and associates at the PNB.
Ananathasubramanian, who was the MD and CEO of the Punjab National Bank before moving to the Allahabad Bank, was named in the CBI charge sheet in connection with the Rs 140-billion fraud through fake LoUs in connivance with some PNB employees.
It was alleged that she failed to exercise proper control over the functioning of the PNB while serving as the bank's managing director.
It enabled the fraud in the bank through misuse of SWIFT (Society for Worldwide Interbank Financial Telecommunications), an international payment gateway for large transactions, at PNB's Brady House branch.
Ananthasubramanian had enjoyed leadership roles in the PNB in two stints. She headed the bank between August 2015 and May 2017, before moving to the Allahabad Bank. She was executive director at the bank from July 2011 to November 2013.
Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 140 billion through issuance of fraudulent letters of undertaking (LoUs).
The Mumbai branch of the PNB had fraudulently issued LoUs for the group of companies belonging to Modi since March 2011.
The total number of LoUs issued to the companies of Nirav Modi, his relatives and the Nirav Modi Group were 1,213, and to Mehul Choksi, his relatives and the Gitanjali Group were 377.
Besides Anathasubramanian, the CBI court had also taken cognisance of sanction for prosecution against former PNB executive director Sanjiv Sharan. He, too, was granted bail on Monday on similar ground.