Government Sacks Two PNB Executive Directors In Connection With Nirav Modi Fraud
The government has sacked two executive directors of Nirav Modi scam-hit Punjab National Bank for their alleged failure in exercising proper control over the functioning of the bank.
Their services were terminated from Jan. 18, as per the Finance Ministry notification.
The central government has removed KV Brahmaji Rao and Sanjiv Sharan from the office of Executive Director of PNB with immediate effect, it said.
It is alleged that there were procedural lapses on part of both the EDs as they failed to take cognisance of the Reserve Bank of India advice of linking Society for Worldwide Interbank Financial Telecommunication with Core Banking Solution system of the bank. The circular was issued in 2016. Some banks implemented the directive, while some did not, including PNB.
Rao was to retire this month, while Sharan was to superannuate in May this year.
In August last year, the government dismissed Allahabad Bank's Usha Ananthasubramanian in connection with the country's biggest bank fraud allegedly carried out by Nirav Modi and associates at PNB. She was the managing director and chief executive officer of PNB before moving to Allahabad Bank.
Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 14,000 crore through issuance of fraudulent letters of undertaking. A Mumbai branch of 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 are 1,213, and to Mehul Choksi, his relatives and the Gitanjali Group are 377.
The CBI has already filed chargesheet in this case. The chargesheet has mentioned names of many employees and top management, including former MD and EDs of the bank.