Centre initiates action to remove Allahabad Bank CEO, 2 PNB directors

The PNB board also divested its two ED – KV Brahmaji Rao and Sanjiv Sharan, of all financial and executive powers, Financial Services Secretary Rajiv Kumar said. 

Similar action is likely to be taken by the board of Allahabad Bank against its CEO and MD Ananthasubramanian, who was the MD of PNB till May 5 last year. 

The Secretary said the Allahabad Bank board has also been asked to divest Ananthasubramanian of all powers and initiate further action.  

There is a set process for removal and dismissal of directors from the board of banks and that has been initiated, Kumar said. Sources said the Allahabad Bank board is likely to meet in a day or two. 

The government holds a little over 62 per cent stake in PNB and close to 65 per cent in Allahabad Bank. Earlier in the day, the PNB board convened an emergency meeting on the insistence from the government’s nominee director. 

“The (PNB) board has decided to divest EDs of the functional and financial responsibilities and have also requested the government to replace them,” Kumar said, adding the government is committed to taking strict action against erring officials. 

Meanwhile, the CBI also filed its first chargesheet in the country’s largest financial scam worth over $2 bn at PNB allegedly committed by billionaire jeweller Nirav Modi.  

The chargesheet detailed the alleged role of PNB’s former chief Ananthasubramanian in the scam. Ananthasubramanian was the MD and CEO of PNB from 2015 to 2017 and was questioned recently by the CBI in connection with the case. “On Monday, agencies filed the chargesheet. 

Around 10 days ago we had asked explanations from the two executive directors at the PNB and the current MD and CEO in Allahabad Bank. This was essentially because of the fact that SWIFT and CBS integration was to take place based on the circular issued by RBI in 2016,” Kumar said. 

Jeweller Nirav Modi used fake letter of undertaking (LoUs) to defraud PNB of over Rs 13,000 crore in connivance with bank officials by exploiting the loophole of non-integration of SWIFT with the Core Banking System. 

“This was the duty of the senior management to minimise the risk in the system. We issued notices and sought explanation 10 days back from top officials of these banks,” he said.