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Nirav Modi case: Delhi Court summons 11 top PNB officials on RBI's complaint

PTI     March 27, 2019

A Delhi court has summoned as accused 11 top officials of the Punjab National Bank (PNB), including former and current executive officials and the current managing director, for alleged violation of banking regulations and criminal conspiracy.

Metropolitan Magistrate Dharmender Singh asked PNB Managing Director (MD) and CEO Sunil Mehta, Executive Director Sanjiv Sharan, former MD Usha Ananthasubramanian, former executive director R S Sangapure and seven others to appear before it on May 24 on the basis of a complaint filed by the Reserve Bank of India.

The court has also summoned as accused serving General Manager I J Arora, Assistant General Managers T R Venkateswaran and I P Singh, Chief Manager S K Srivastava, former general managers Nehal Ahad and Rakesh Kumar and former deputy general manager Sunil Mohan.

Also Read: RBI imposes Rs 2 crore fine on PNB for flouting SWIFT rules

In its complaint, the RBI has alleged non-compliance of its 2016 order directing commercial banks, including the PNB, to integrate their core banking system with various critical applications to reduce online fraud.

The central bank alleged that the accused willfully and deliberately gave false information in their compliance report and the PNB's core banking system was not integrated with the applications and there was no online integration of SWIFT with the RBI's Core Banking Solution (CBS).

SWIFT is a messaging system that enables banks and financial institutions to send and receive information about financial transactions through encrypted codes.

The RBI has further alleged that the accused willfully and deliberately made false statements in the compliance report despite being aware of the risks and repercussions of failing to integrate SWIFT with the CBS.

Also Read: PNB fraud case: Nirav Modi may get arrested in UK, but he will be out on bail just like Vijay Mallya

The RBI, in its circular issued to all commercial banks, including the PNB, had advised the banks to strengthen the controls around the operating environment for fund transfers through SWIFT or similar interfaces and banks were advised to minimise the practice of direct creation of payment messages in the SWIFT environment with routing the same through CBS.

The RBI claimed that the case came to light during systems inspection at the PNB's Brady House Branch in Mumbai, where it was found that the information provided by the officials in the last few years were completely false.

Also Read: Nirav Modi arrested in London: PNB scam accused denied bail by Westminster Court

"The accused have willfully made false statement in utter disregard to their statutory obligation of the Banking Regulation Act, 1949." RBI alleged.

"Accused have deliberately furnished false and misleading statements to RBI and it was done with common intention and in connivance with each other," it added.

Also Read: Two PNB Executive Directors sacked for failure to stop Nirav Modi fraud

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