The irony: In three years, PNB won three awards for vigilancehttps://indianexpress.com/article/india/nirav-modi-fraud-case-the-irony-in-three-years-pnb-won-three-awards-for-vigilance-5069213/

The irony: In three years, PNB won three awards for vigilance

Nirav Modi, PNB fraud case: Two of these awards came in 2017 — the year PNB issued 293 LoUs to companies owned by Modi and his family — and were given out by Central Vigilance Commissioner (CVC) KV Chowdary.

The irony: In three years, PNB won three awards for vigilance
Over the past three years, PNB, that is now in the dock for allegedly allowing rogue employees to game the system to benefit firms controlled by diamantaires Nirav Modi and Mehul Choksi, bagged three vigilance excellence awards.

Even as Punjab National Bank was being defrauded of thousands of crores — allegedly Rs 11,400 crore over seven long years — it was winning awards for excellence in banking vigilance.

Over the past three years, the government-owned bank that is now in the dock for allegedly allowing rogue employees to game the system to benefit firms controlled by diamantaires Nirav Modi and Mehul Choksi bagged three vigilance excellence awards.

Two of these awards came in 2017 — the year PNB issued 293 LoUs to companies owned by Modi and his family — and were given out by Central Vigilance Commissioner (CVC) KV Chowdary.

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

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In the second week of March last year, PNB’s Chief Vigilance Officer S K Nagpal received a “Corporate Vigilance Excellence Award” from the hands of Chowdary at a “Vigilance Conclave” organised by the Institute of Public Enterprise (IPE), an MBA institute on campus at Osmania University, Hyderabad. Chowdary was the key speaker at the event, the eighth of its kind organised by the institute.

Towards the end of October 2017, the Central Vigilance Commission had organised a Vigilance Awareness Week in New Delhi, where it gave away awards to various PSUs for their anti-corruption work, carried out in adherence to guidelines laid down by the Commission and the Reserve Bank of India.

According to the Commission’s website, PNB bagged the Vigilance Excellence Award for “‘Outstanding’ Achievement in ‘Timely Completion of Disciplinary Proceedings’”. CVC Chowdary presented the award to Nagpal “for completing 92% of the total disciplinary proceedings within the prescribed timelines”.

The irony: In three years, PNB won three awards for vigilance
The vigilance award given to PNB by IPE, Hyderabad. (Source: PNB website)

On the Hyderabad award, Chowdary told The Indian Express,”They organise this annual event where 10-12 PSUs participate. I was called there as a speaker. After my speech, they requested me to distribute some certificates, which I did. PNB and some other PSUs also won some certificates. The institute’s management selects winners based on some parameters set by them.”

On the Commission’s own award, the CVC said, “CVC gives awards annually based on various categories of work. PNB was awarded for bringing down departmental proceedings. See, if you do well in English, you will get good marks. But that won’t take you through Hindi as well.”

Read | Punjab National Bank fraud: How the system was gamed

The CVC has summoned the PNB brass on Monday to answer questions on lapses by the bank’s employees in connection with the alleged Nirav Modi scam. Chowdary is likely to take stock of where the bank erred in allowing the fraud to pass undetected for years.

The irony: In three years, PNB won three awards for vigilance
The Punjab National Bank (PNB) branch where fraudulent transactions were detected. (Express Photo: Ganesh Shirsekar)

The PNB website says the bank won the IPE vigilance award in 2014-15 as well, for “improved handling of complaints, institution of whistleblowing system, quick disposal of vigilance cases, reduction in outstanding vigilance cases, pruning down of vigilance cases of more than one year etc”.

Read | Inside the Punjab National Bank fraud: What an LoU is, how case may impact the bank

The citation said PNB had taken various “preventive/anti-corruption measures”, apart from steps such as “job rotation in LODI list/Agreed list to non-sensitive assignments, measures of predictive/corrective vigilance, introduction of vigilance audit system, introduction of new Risk Based Staff Accountability Policy etc”. It noted that the work of the vigilance department had saved the bank over Rs 45 crore, and congratulated its then CVO Siva Kumar Gupta.

Read | In December, Nirav Modi’s firm was moving to go public, raise funds

A senior PNB official said, “Vigilance awards are given based on overall performance. But in any large organisation there can be a few crooks. This LoU fraud was done by a couple of people in one branch in an organisation of 70,000 employees with 7,000 bank branches. This does not indicate deterioration in the vigilance standards. However, I agree that there was a failure of the bank’s internal control systems in not detecting the fraud early on.”

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A questionnaire emailed to IPE director R K Mishra did not elicit a response.