CBI charges former PNB boss and 10 staff in fraud case

Billionaire jeweller Nirav Modi is at the centre of the over $2 billion PNB fraud

Reserve Bank of India has imposed restrictions on Allahabad Bank on lending to risky assets and raising high-cost deposits in view of deteriorating financial health even as finance ministry has asked the lender to take away all the powers of its CEO and MD Usha Ananthasubramanian.

The CBI has chargesheeted Ananthasubramanian and 21 others, including 11 bank officials in connection with the fraud in PNB allegedly masterminded by diamantire Nirav Modi and his uncle Mehul Choksi.

The two PNB executives and Ananthasubramanian did not respond to multiple calls and messages seeking comment, while Allahabad Bank was not reachable for comment.

As per the ownership in the bank is concerned, the Government holds a little over 62% stake in PNB and close to 65% in Allahabad Bank.

It has been revealed that these officials did not follow circulars issued by the central bank on the SWIFT control system in 2016. The sources confirmed to PTI that the Allahabad Bank board is likely to meet in a day or two. The Allahabad Bank board has been asked to divest Ananthasubramanian of all powers and initiate further action. 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.

Bought jewellery from Nirav Modi stores using cash?

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In a filing to the Bombay Stock Exchange, PNB said, "In view of the recent developments, the board of the bank in its meeting made a decision to divest the functional powers of executive directors K.V. Brahmaiji Rao and Sanjiv Sharan and sought their replacement from the department of financial services". Section 8 of Banking Regulation Act define how do you remove the director.

Besides, investigative authorities have arrested at least 20 people in connection to the scam while non-bailable warrants have been issued under the names of the key accused - Nirav Modi and Mehul Choksi - who had fled the country days before PNB had disclosed details of the mega scam. "The departmental inquiry will continue against them separately", he said.

He said the exposure of the banking sector to the gems and jewellery sector was huge and the RBI should have taken necessary action as the sector was not a priority sector. The chargesheet pertains to the CBI's first FIR, which detected a scam of Rs 6.280 crore.

"PNB scam case: Central Bureau of Investigation submitted charge-sheet in Special CBI Court in Mumbai", the news agency ANI reported.

Kumar said there is a set process for the removal and dismissal of directors from the board of a bank.

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