Allahabad Bank may show CEO the door

Allahabad Bank may show CEO the door

"On Monday, the PNB held a board meeting and made a decision to remove the two executive directors, requesting the government to replace them", Rajiv Kumar, financial services secretary, told reporters on Monday.

The CBI has not given in detail the role of Mehul Choksi in the charge sheet.

A CBI official, on the condition of anonymity, revealed that current Allahabad Bank CEO and MD Usha Ananthasubramanian will be charged. Usha Ananthasubramaniam, who was the MD and the CEO of the PNB bank is also expected to be included in the charge sheet. The agency has also named PNB executive directors K.V. Brahmaji Rao and Sanjiv Sharan and general manager (international operations) Nehal Ahad in the chargesheet.

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Rajiv Kumar, Secretary, Dept Financial Services (DFS) told media-persons, "PNB board meeting is underway, they will announce the action taken after the meeting". The PNB board convened an emergency meeting on Monday on the insistence from the government's nominee director.

A similar fraud was detected in 2016, in which funds under the garb of LoUs were transferred in favour of a Hong-Kong-based company, purportedly issued by the Chandigarh branch of a nationalised bank to overseas branches of two other nationalised banks, including PNB.

At the heart of the PNB fraud was the Society for Worldwide Interbank Financial Telecommunications (SWIFT) messaging system, which is used by banks worldwide to enable cross-border transactions. In an earlier stint, Ananthasubramanian also served as the Executive Director of Punjab National Bank from July 2011 to November 2013. The charge sheet has been filed to investigate the Rs 13,000 crore fraud allegedly committed by diamond merchant Nirav Modi. Kumar said there is a set process for removal and dismissal of directors from the board of banks and that has been initiated. "A show-cause notice to the bank executives was issued around 10 days ago when we found there were lapses", Kumar explained. She was questioned recently by the CBI in connection with the case. "However, the said senior PNB officials, both serving and retired, failed to do so and therefore they are chargesheeted", said an official familiar to the probe. "We will only take action when we have substantive proof and not on hearsay", he said. The stock exchanges had asked a query from the bank asking if its CEO was charged by CBI in the PNB fraud.

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