Centre clips power of Allahabad Bank CEO
2 executive directors of PNB to have powers divested.
New Delhi: The government on Monday asked Allahabad Bank board to take away all the powers of its CEO and MD Usha Ananthasubramanian, former chief of Punjab National Bank, in connection with the $2 billion fraud in PNB perpetrated by billionaire jeweller Nirav Modi.
The government has also initiated action for removal of Ms. Ananthasubramanian as CEO of the bank and two executive directors of Punjab National Bank.
The move comes after reports that Ms. Ananthasubramanian was among 22 people charge-sheeted by the CBI on Monday in the Nirav Modi fraud case.
The charge sheet, filed in a special court in Mumbai, detailed the alleged role of Ms. Ananthasubramanian, who was the MD and CEO of PNB from 2015 to 2017 and was questioned recently by the CBI in connection with the case, said reports.
CBI has also named PNB executive directors K.V. Brahmaji Rao and Sanjiv Sharan, and general manager (international operations) Nehal Ahad in its charge sheet.
Financial services secretary Rajiv Kumar said PNB board divested these two executive directors — Mr Rao and Mr Sharan — of all financial and executive powers.
Mr Kumar further said a show cause notice was issued to them about 10-days back by the ministry. He said there is a set process for removal and dismissal of directors from the board of banks and that has been initiated.
Allahabad Bank board is likely to meet in a day or two. “One notice was issued 10 days back. Section 8 of Banking Regulation Act define how do you remove the director. We have initiated action for that (removal) also. So this is a clear message that we have to be responsible for what we do. We will only take action when we have substantive proof and not on hearsay,” he said.
The government, he said, has taken a strict action which reflects its resolve to ensure the highest corporate governance in state-owned banks.
CBI said the fraudulent Letter of Undertakings issued to Nirav Modi were for Rs 6,498.20 crore.
The charge sheet primarily deals with the first FIR registered in the case relating to the fraudulent issuance of LoUs to Diamond R US, Solar Exports and Stellar Diamonds. The government holds a little over 62 per cent stake in PNB and close to 65 per cent in Allahabad Bank.