CBI grills former PNB head, top ICICI Bank official

Former Punjab National Bank (PNB) managing director Usha Ananthasubramanian and ICICI Bank executive director N.S. Kannan were examined by the Central Bureau of Investigation (CBI) on Tuesday, even as the size of the fraud carried out by the Nirav Modi group of firms at the country’s second largest bank has now swelled to over ₹12,600 crore.

Ms. Ananthasubramanian is now the managing director and CEO of Allahabad Bank and was at the helm of PNB’s affairs from August 2015 to May 2017.

GMs interrogated

The CBI, which had earlier questioned PNB’s present MD and CEO Sunil Mehta as well as executive director K.V. Brahmaji Rao, also interrogated two general managers of the bank on Tuesday, along with two of its statutory auditors.

 

The Finance Ministry directed top officials of public sector banks (PSBs) to examine all their non-performing loan accounts for possible instances of fraud, reiterating existing norms.

“15 day deadline for PSBs to take pre-emptive action and identify gaps and weaknesses to gear up for rising operational and technical risks; Clear accountability of senior functionaries,” Rajiv Kumar, secretary, financial services in the Finance Ministry said on social media site Twitter.

“PSB MDs directed to detect bank frauds and consequential



wilful default in time and refer cases to CBI. To examine all NPA accounts over Rs. 50Cr for possible fraud, Involve the ED (Enforcement Directorate, Department of Revenue Intelligence for PMLA/FEMA/EXIM violations if any,” Mr Kumar added. PMLA stands for the Prevention of Money Laundering Act and FEMA is the Foreign Exchange Management Act.

Probe expanded

PNB, in a late Monday night communique to the stock exchanges, said that its losses on account of the fraudulent transactions by diamond merchants Nirav Modi and Mehul Choksi’s group of firms, could further increase by $204.25 million or about Rs 1328 crore. Earlier, the lender had reported about $1.8 billion or Rs 11,500 crore of unauthorised transactions as part of the fraud.

CBI officials, however, pegged the size of the fraud at Rs 12,636 crore, after including the latest fraudulent transactions worth Rs1,251 crore reported by the bank.

“We also sought some clarifications from N. S. Kannan, executive director of ICICI Bank that is the leader of a consortium of over 30 banks that has lent Rs 5,280 crore to the Gitanjali group. ICICI Bank had an exposure of Rs 773 crore,” an official said. During searches, the agency had earlier seized documents pertaining to the loans.

ICICI Bank clarified it has no exposure to the Nirav Modi group of companies.