PNB scam: Former director may have been involved, say sources

By Sanjay Singh

The name of a former highly-placed bank official has emerged during the interrogation of the accused in the Punjab National Bank scam, sources said.

Sources said that the former director-level officer of the PNB is likely to be questioned soon.

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Five bank officials, including the two at the Mumbai branch, have been arrested in the scam worth Rs 11,400 crores and in which billionaire jewellery designer Nirav Modi is the main accused.

The bank official was director of the PNB few years back. Later he joined as chief managing director in another bank, the sources added.

It's not just PNB employees that are on the radar of the Central Bureau of Investigation (CBI). Sources claim that the role of some employees of about 11 banks is also being investigated by the agency.

These banks include foreign branches of the Allahabad Bank, State Bank of India (SBI), Union Bank, UCO Bank and the Axis Bank.

The CBI suspects the connivance of some bank personnel employed at foreign branches of these Indian banks for remitted foreign currency upon presenting fraudulent LoUs (Letters of Undertaking) without cross checking or verifying the authenticity of LoUs with the PNB, for not following other standard operating procedures and for not raising alarm over fake LoUs.

The banks under the CBI scanner are the Mauritius and Frankfurt branches of the SBI, the Antwerp branch of the Bank of India, the Bahrain branch of the Canara Bank, the Hong Kong branch of the UCO Bank, the Allahabad bank and the Axis Bank.

The PNB in its internal inquiry gave clean chit to its auditors. However, the CBI suspects the crucial involvement of a person from their internal audit team and also the statutory audit team. Two charted accountants are also on agency's radar for their alleged involvement in the fraud.