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Nirav Modi case: How come no one noticed for seven years, CVC asks PNB

Nirav Modi fraud case: Sources said the CVC asked PNB officials to investigate how the irregularities went undetected for seven years given that audits were conducted each year.

Written by Deeptiman Tiwary | New Delhi |
Updated: February 20, 2018 7:01:46 am
An Enforcement Directorate team conducting search at a jewellery shop in Thane on Monday. Deepak Joshi

Central Vigilance Commissioner K V Chowdary, who held a meeting Monday with top officials of Punjab National Bank, asked them to conduct a thorough investigation into the Rs 11,400-crore Nirav Modi case and submit a report in ten days.

Sources said the CVC asked PNB officials to investigate how the irregularities went undetected for seven years given that audits were conducted each year. He also asked officials to reassess regulatory mechanisms and the vigilance apparatus in place.

“At present, it is being said that the entire scam was engineered by delinquent officials. But we will not know if more people are involved until a thorough investigation is carried out. What mistakes were committed where. I have asked PNB to conduct a detailed probe and see if they have missed anything in the preliminary probe. I have asked for a report to be submitted within ten days,” Chowdary said.

Read | Enforcement Directorate asks RBI for PNB audits since 2011, searches Nirav Modi’s home, offices

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Sources said the commission has reiterated its guidelines on transfer of bank officials and asked all banks to follow it strictly. The guidelines suggest that no manager-level official should remain posted at one place for more than three years while managers with specialist positions can continue for a maximum of five years on one post.

Retired PNB deputy manager Gokulnath Shetty, a key accused in the Nirav Modi case, served at the Brady House branch in Mumbai for eight years. He issued 293 Letters of Undertaking to companies of Nirav Modi and his family during this period, causing an alleged loss of Rs 11,400 crore to the bank.

Read | Nirav Modi case: Stung by fraud, govt looks at supervisory failures in banks, RBI

While errant bank employees did not make entries of the unauthorised LoUs in the Core Banking System, sources said the irregularities could have been detected had auditors matched SWIFT messages with CBS data.

Read | PNB Fraud: Auditor Deloitte rang alarm bells on Nirav Modi two years ago

During the meeting with the CVC, banks officials, sources said, shared details of the action taken against officials found to have had any association with transactions related to Nirav Modi.

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