Nirav Modi fraud: PNB removes two EDs

CBI files chargesheet in Nirav Modi case names former PNB chief other top officials

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

The chargesheet filed on Monday is based on CBI's FIR registered on January 31 against Nirav Modi, his wife Ami, brother Nishal, and uncle Choksi, among others. Former PNB deputy manager Gokulnath Shetty, who allegedly issued fraudulent letters of undertaking (LoUs) to Nirav's firms, the bank's executive directors KV Brahmjai Rao and Sanjeev Sharan and general manager (international operations) Nehal Ahad have been named in the chargesheet submitted on Monday. "In the meantime, the bank has convened a meeting of its Board of Directors on May 15 to discuss the matter", the lender said in a regulatory filing.

"We had asked for explanation from two EDs (executive directors) in PNB and Allahabad Bank MD in PNB case".

Limosin added that the agency has included four top PNB officials for aiding the fraud.

Among accused is bank's former chief Usha Ananthasubramanian.

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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.

Meanwhile, RBI advised Allahabad Bank to restrict expansion of risk-weight assets and to reduce exposure to un-rated and high-risk loans after it reported Rs 3510 crore net loss in the fourth quarter, largely owing to the exposure it had on the PNB-Nirav Modi fraud. "A show-cause notice to the bank executives was issued around 10 days ago when we found there were lapses", Kumar explained.

When asked about action against two MDs named in the FIR related to loans given to Aircel by IDBI Bank, he said, "I would like to make it clear that you can not take action only on hearsay". Section 8 of Banking Regulation Act define how do you remove the director.

When asked about action against two MDs named in the FIR related to loans given to Aircel by IDBI Bank, he said, "You can not take action only on hearsay. The departmental inquiry will continue against them separately", he said. The CBI recently questioned Ananthasubramanian in connection with the scam. They are responsible persons and it's only a few who are into this kind of thing otherwise by and large bankers have contributed to the economic growth of the country.

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