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PNB fraud: CVC steps in, meets top banks and finance ministry officials

The Chief Vigilance Commission has issued a guidance note to PSU lenders to transfer senior bank officers who have been at the same post for three years, and clerical staff who have been at the same post for five years, according to a source.

business Updated: Feb 19, 2018 23:04 IST
Rajesh Ahuja
Rajesh Ahuja
Hindustan Times, New Delhi
PNB fraud,Punjab National Bank,Banking system
Officials of Mumbai’s Brady House branch of PNB, without approvals, issued so-called letters of undertaking, or LoUs, (essentially guarantees) that helped Modi’s companies raise credit from other banks(PTI Photo)

Central Vigilance Commission’s (CVC) chief KV Chowdary on Monday met senior officials of Punjab National Bank (PNB) to enquire how the Rs 11,400 crore fraud, allegedly involving jewellery designer Nirav Modi and his uncle Mehul Choksi, went undetected for almost seven years.

The meeting of the PNB top management with Chowdary and vigilance commissioner TM Bhasin lasted for almost two hours. Finance ministry officials were also present in the meeting. The chief vigilance commissioner and his colleague asked the PNB to submit a report in this regard, said a person familiar with the discussions who asked not to be named.

“The CVC asked about non-linking of the Core Banking System of the bank with the SWIFT system (a messaging system used for inter-bank transactions) at PNB,” the person said.

The CBI has said that due to non-linking of Core Banking system with the SWIFT system, bank officials in connivance with Nirav Modi’s companies managed to perpetuate the alleged fraud and keep it hidden.

The bank officials informed the CVC about the action taken after the detection of fraud and the steps taken against officials who did not perform their supervisory roles, said the person.

Besides meeting the PNB and finance ministry officials, the CVC also met a superintended of police of Bank Security and Fraud Cell of the CBI.

First Published: Feb 19, 2018 12:26 IST