PNB fraud: CBI gets govt nod to act against Usha Ananthasubramanian

The government has given sanction for prosecution against PNB executive director Sanjiv Sharan as part of the clean up exercise in the system.

Illustration: Uttam Ghosh/Rediff.com

The government on Monday dismissed Usha Ananathasubramanian, who was three months ago divested of her powers as MD and CEO Allahabad Bank following the country's biggest bank fraud allegedly carried out by Nirav Modi and associates at PNB.

MD and CEO of Punjab National Bank before moving to Allahabad Bank, Ananathasubramanian was named in the CBI charge-sheet in connection with the Rs 14,000 crore fraud through fake LoUs in connivance with some PNB employees.

She has been dismissed with immediate effect in the interest of Allahabad Bank, sources citing government notification said.

It was alleged that she failed to exercise proper control over the functioning of PNB while serving as MD of the bank.

It enabled the fraud in the bank through misuse of SWIFT at PNB's Brady House branch.

Besides Anathasubramanian, the government has given sanction for prosecution against PNB executive director Sanjiv Sharan as part of the clean up exercise in the system.

However, the government is yet to take any decision on another PNB ED K V Brahmaji Rao, whose name also figured in the CBI charge-sheet.

RBI has also given prosecution sanction against Anathasubramanian and Sharan.

It has also asked the government to prosecute former ED Ram S Sangapure.

Ananthasubramanian had enjoyed leadership roles in PNB in two stints.

She headed the bank between August 2015 and May 2017, before moving to Allahabad Bank.

She was executive director at the bank from July 2011 to November 2013.

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.

With regards to provision made for the loss incurred on account of the Nirav Modi fraud, the bank provided Rs 7,178 crore, 50 per cent of the total amount of Rs 14,356 crore in the fourth quarter of the last financial year.

The remaining amount will be covered in the three quarters of the ongoing financial year.

PNB paid Rs 6,586.11 crore to other banks to discharge its liabilities towards LoUs and foreign letters of credit issued fraudulently and in unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank, which was then not integrated with core banking solution.