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PNB comes clean on Virat Kohli ending endorsement, roping in PwC to probe Rs 11,400 crore scam

The Punjab National Bank has also issued a statement saying that it has not imposed any withdrawal limits of Rs 3000 on its customers and normal banking activities are going on. | February 23, 2018 | Updated 21:51 IST
PNB comes clean on Virat Kohli ending endorsement, roping in PwC to probe Rs 11,400 crore scam

Punjab National Bank (PNB) trashed reports of Virat Kohli stepping down as the bank's brand ambassador. The public sector bank clarified that the Indian cricket team captain is not going to end his advertisement contract with the bank in wake of the Rs 11,400 scam by diamond businessman Nirav Modi and his uncle Mehul Choksi.

"Mr Virat Kohli is our brand ambassador," the bank said, denying media reports that he is going to discontinue his endorsement with the bank. "The same is again totally false and incorrect," it added.

PNB also denied reports that it has roped in audit firm PricewaterhouseCoopers (PwC) to investigate the alleged fraud by Modi and gather evidence against him and his associates. The media report is "totally incorrect", it said.

The bank has also issued a statement saying that it has not imposed any withdrawal limits on its customers and normal banking activities are going on. Reports of PNB putting into effect a withdrawal limit of Rs 3,000 per customer were doing the rounds of social media.

"It is absolutely incorrect; no such limit has been fixed by the bank and normal banking activities are going as usual. No restrictions on the withdrawals have been imposed by the bank," PNB clarified.

On reports that the Reserve Bank and the government have asked the bank to pay the defrauded amount to other banks, it said, "The report is totally incorrect and the bank confirms not having received any such instructions."

PNB also denied the report stating that around 18,000 transfers done by the bank recently. Only 1,415 transfers of its employees have been carried out as per its extant transfer policy, the bank said.

"The work in the branches is going on smoothly and the above transfers are in no way affecting the customer service in the Bank," PNB added.

PNB reassured that it has the capacity and capability to handle the situation and protect the interest of the institution, customers and stakeholders. It also reaffirmed that the bank is committed to honour all bonafide commitments.

"Bank has already initiated prompt steps for protecting the financial interest of all the lenders/stakeholders including issuance of advisory to lenders involved and to act swiftly to recover the dues," PNB said.

It further added, "In pursuant of Clean and Responsible Banking agenda of the government, bank has taken proactive steps to bring the culprits to the books and has initiated strong action against the entities and the staff involved."

Meanwhile, CII has stressed to bring down government holding in banks to 52 per cent and then gradually to 33 per cent to increase wider private participation. The industry body condemned the malfeasance by 'unethical enterprises'.

"The current episode of financial fraud shows gaps in supervision and monitoring systems at the bank level which have the potential to become disruptive for the industry and the financial sector both. CII condemns such malfeasance by unethical enterprises, which are allegedly perpetrated in consort with certain corrupt employees of the affected banks," Chandrajit Banerjee, Director General, CII, said in a statement.

The industry body has suggested enhancing supervision and monitoring at all levels, infusion of professionalism in bank's management and dilution of government stake in public sector banks (PSBs) to bring them down to 52 per cent in the first phase and then further reduce to 33 per cent.

"CII strongly feels that the current episode of malfeasance calls for focus and facilitation by the regulator to improve monitoring and supervision at the bank level. On its part, CII will continue to work on corporate governance at the enterprise level to inculcate ethics and values as part of DNA of business practices," Banerjee said.

Government should consider lowering its stake in Public Sector Banks and increasing the equity spread through wider private participation. This should be accompanied by consolidation of PSBs to result in fewer but stronger institutions of global scale, CII said.

Last week, Punjab National Bank stirred up a storm when it disclosed a Rs 11,400 crore scam happening in connivance with a few bank officials since 2011 in a stock exchange filing. Some PNB officials allegedly had issued issue fraudulent letters of undertakings (LoUs) to diamond merchant Nirav Modi and his associates for loans from foreign branches of other banks.

PNB has already filed an FIR in this regard and multi-probe agencies are investigating the matter including the Enforcement Directorate and CBI. As of now, Nirav Modi and his uncle Mehul Choksi, the prime accused in the fraud are absconding, along with other accomplices.

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