Punjab National Bank today said that it has appointed consultancy firm BDO India to conduct a forensic audit into the Nirav Modi fraud case.
This is in addition to the investigations being conducted by the Central Bureau of Investigation and the Enforcement Directorate. The forensic audit will be completed by May 27, the bank said in a notification to the stock exchanges late Monday evening.
As part of a move to clean up its act, PNB will implement stricter checks and audits. The Audit Committee of the Board of the bank has asked it to conduct external audits of all of its branches, since some branches were exempted owing to the size of business they generated.
“ACB has decided that a concerted effort be made to improve quality of external audit and to make this possible audit charges were revised upwards so that audit firms can send more senior people for audit,” the stock exchange notification said.
PNB has implemented a three-level authentication system with respect to SWIFT messages, to ensure that every transaction is thoroughly reconciled with every message sent on the SWIFT network, with effect from Feb. 12.
In the fraud letter of undertaking case, the bank had noted that some of its employees had managed to send out fraudulent SWIFT messages to other banks, without PNB recording it on its core banking solution. This meant that the bank took on non-funded exposure without knowing about it.
The bank also said that, as on Jan. 29, it had installed Finacle 10, the latest version of CBS, and that it is now in testing phase. This new version allowed the bank’s authorised officials to monitor various transactions coming out of a specific branch.