New Delhi: The CBI on Tuesday questioned the CEO and the MD of Allahabad Bank Usha Ananthasubramanian in connection with the Punjab National Bank (PNB) fraud allegedly involving billionaire jewellers Nirav Modi and Mehul Choksi, officials said in the national capital.
The PNB, in a late night filing to stock exchanges, said the scam has swelled by USD 204.25 million. The quantum of alleged fraud perpetrated in the bank by billionaire jewellers Modi and Choksi now stands at close to USD 2 billion.
Ananthasubramanian (60), who was recently elected as the chief of Indian Banks' Association, had held senior positions in the PNB where Modi and Choksi were allegedly getting fraudulent guarantees since 2011, they said.
She was the Managing Director and the CEO of PNB since August 14, 2015 before being appointed in Allahabad Bank on May 6, 2017. She also held the position of the Executive Director of the bank from July 2011 to November 2013, they said.
The CBI said she is not being questioned as accused but the agency wants to get clarifications as to how such huge transactions were bypassing surveillance system in the bank and whether audit reports were red flagging these transactions.
Five statutory auditors of PNB have also been questioned by the agency in this regard.
The CBI is suspecting that the audit reports were underlining these transactions, but senior officials chose to ignore them, the officials said, but added that this is just a theory which is yet to be verified on the basis of corroborative evidence.
The probe agency officials on Tuesday said the quantum of the alleged fraud perpetrated in the bank by billionaire jewellers Modi and Choksi stands close to USD 2 billion after the teams of the CBI and PNB found fresh Letters of Undertakings (LoUs) and Letters of Credit (LCs) worth Rs 1,251 crore related to Choksi's Gitanjali group of companies.
The PNB had earlier put the defrauded amount at Rs 11,394.02 crore (USD 1.77 billion).
LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant a short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to credit giving bank along with accruing interest.
The probe into account books of Choksi's companies also showed loans worth over Rs 5,280 by a consortium of 34 banks led by ICICI bank.
In order to get further details on the loan and to get a clear trail of money used by Gitanjali group, the CBI also examined another noted banker, N S Kannan of the ICICI Bank, officials said.
When asked whether the loan will be part of the present probe involving Rs 12,636 crore, the officials clarified that the questioning of Kannan is more focussed on getting financial profile of Gitanjali group of companies and how it was using the money borrowed from the banks rather than present case which relates to fraudulent issuance of guarantees.
The exposure of the ICICI bank in the loan is Rs 773 crore. The bank is part of a consortium which also includes several private and public sector banks including the PNB.
In a statement, the ICICI Bank said that it has no exposure to the Nirav Modi group of companies.
"We have not issued any Letter of Undertaking (LoU) nor do we have any buyers credit exposure against LoUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies. We are working capital lenders to the Gitanjali group of companies along with several other banks in the consortium," the bank's spokesperson said.
He said the bank's exposure to the Gitanjali group of companies is not the largest among lenders in the consortium and the bank is fully co-operating with the investigating agencies in their efforts.
Two sitting general managers -- Nehal Ahad handling International Banking of the PNB and Vimlesh Kumar of Mumbai zone where the alleged fraud was detected, are also being questioned by the agency, the officials said.
It is alleged that LoUs and LCs worth close to USD 2 billion were issued to the companies of uncle-nephew duo of Choksi and Modi from the Brady Road branch of the bank through SWIFT (Society for Worldwide Interbank Financial Telecommunication) messages.
These messages were allegedly not entered in the banking software of the PNB to bypass surveillance.
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