The CBI Tuesday questioned Usha Ananthasubramanian, former managing director of Punjab National Bank, in connection with the loan scandal involving companies of diamantaire Nirav Modi and his uncle Mehul Choksi. Agency officials said the extent of the fraudulent transactions at the bank had been revised upward to Rs 12,636 crore following fresh information from the bank.
Ananthasubramanian is currently CEO of Allahabad Bank, one of the banks whose overseas branch provided buyer’s credit to Modi and Choksi against Letters of Undertaking issued by the PNB.
In a communication to the CBI, the PNB said its Brady House branch in Mumbai had issued more than the hitherto known 293 LoUs, exposing the bank to further fraud of Rs 1,251 crore.
CBI sources said all these LoUs were issued in 2017-18 on the request of Choksi-owned Gitanjali group of companies. The total number of LoUs under the scanner, sources said, add up to more than 300.
The PNB, in a filing to stock exchanges, said the amount of unauthorised transactions could go up by more than Rs 1,300 crore. “We have to inform that quantum of reported unauthorised transactions can increase by $204.25 million (approximately),” the filing said.
Other than Ananthasubramanian, the CBI also questioned Nehal Ahad, general manager, international division of PNB, and Vimlesh Kumar, general manager, Mumbai zone. On Monday, the agency had questioned three statutory auditors of the bank. Two more auditors were being questioned Tuesday.
It also questioned N S Kannan, executive director, ICICI Bank, to understand the account books of the Gitanjali group.
The ICICI Bank said: “We have no exposure to the Nirav Modi group of companies. We have not issued any Letter of Undertaking nor do we have any buyer’s credit exposure against LOUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies. We are working capital lenders to the Gitanjali group of companies along with several other banks in the consortium. Our exposure to the Gitanjali group of companies is not the largest among lenders in the consortium. We are fully co-operating with the investigating agencies in their efforts.”
Ananthasubramanian, CBI sources said, was being questioned to understand how the PNB granted LoUs during her time at the bank and what information she had on the bank’s dealings with Modi and Choksi. She was PNB managing director from August 2015 to May 2017.
As chairperson of the Indian Banks Association, Ananthasubramanian issued a statement two days ago on the PNB scam, saying banks needed to improve their risk management systems and plug security loopholes. She stressed on connecting the SWIFT system with the Core Banking System, a lacuna that led to the PNB fraud going undetected for several years.