PNB posts biggest ever quarterly loss of ₹ 13417 cr in Q4

Frederick Owens
May 16, 2018

Punjab National Bank (PNB) reported a 134.17 billion-rupee (S$2.65 billion) fourth-quarter net loss on Tuesday, the biggest ever by an Indian lender as the state-run bank booked provisions to cover a massive fraud.

According to sources, the senior bank officials named in the charge sheet include, Usha Ananthasubramanian, then MD & CEO, PNB; K V Bramhaji Rao, ED, PNB; and Sanjeev Sharan, ED, PNB.

Meanwhile on Monday, the Central Bureau of Investigation (CBI) filed its first chargesheet in PNB scam. Nirav's employees Vipul Ambani and Kavita Manikar are also listed as accused, but the agency has left out Nirav's wife, Ami.

CBI Spokesperson Abhishek Dayal said that the CBI has searched 42 premises, arrested 15 persons and questioned 80 witnesses in the case.

They said that a separate chargesheet in the second case involving Choksi will be filed later. Liabilities worth Rs 6,586.1 crore were paid by the bank on account of LoUs that matured as of March 31, 2018. The transactions happened without any sanctioned limit or cash margin and without making any entries in the bank's CBS system.

Investigators found that the funds were siphoned off to purported overseas supplier firms that was a set-up by Nirav Modi and his firms. Of the total misappropriated amount, Rs 6,498.2 crore has been attributed to Nirav.

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Giving details of the charges against Usha, the CBI sources said she was the MD and CEO of PNB when a similar case of LoU fraud was reported from Indian Overseas Bank, Chandigarh in 2016 where credits were issued by PNB's Dubai branch on the basis of these guarantees. "They misinterpreted the directives", a CBI officer said.

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

"The moment I have definitive information either from the regulation side, supervision side or investigation side, the government will not hesitate in taking action to protect people's trust in the banking system", he said. Other top executives at PNB, who served between 2011 and 2017, the period when the fraud was perpetrated, reportedly may also come under the CBI's scanner.

The officials said Nirav Modi and Nishal were beneficiaries of the fraud, authorised signatories, and in the know of the whole scam.

One source familiar with the matter said another charge sheet would likely be filed later this week naming more individuals in the ongoing probe. The chargesheet, however, did not name Nirav's wife Ami and his uncle and business partner Mehul Choksi.

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