CBI to send an extensive assessment report to the Govt. and RBI while investigating PNB fraud

Having noticed vital irregularities in the banking sector while investigating the Punjab National Bank fraud worth Rs. 13,578 crore, the CBI will soon send an extensive assessment report to the government and the RBI stating errors in the banking industry and suggesting corrective measures. This comes even as the agency has almost completed the probe in the PNB scam and is preparing to file chargesheet against Nirav Modi, Mehul Choksi, and 17 others next month. The chargesheet, which will mention that PNB issued 293 LoUs and 224 FLCs to Modi and Choksi, will be important in the extradition of the fugitive. The report will have details on how bank officials ignore RBI guidelines while sanctioning credit facilities, favor certain individuals/ companies by looking at their brand value and how loans are sanctioned arbitrarily without verifying documents submitted by the borrowers, irregularities in the audit of branches and poor oversight of branches having high-value transactions. A source said, “ In the case of Nirav Modi and Mehul Choksi, PNB's Brady House branch issued 293 LoUs and 224 FLCs to overseas branches of Indian banks. There was no genuine effort from PNB to verify if the money was being given to Nirav Modi's suppliers or not. Also, the overseas branches didn't bother to check the documents or raise an alarm on why PNB officers referred LoUs beyond the timeline of 90 days, in some instances for about 360 days.” According to sources, the CBI's assessment report will also explain how banks sit on frauds for a long time before approaching investigation agencies, anomalies in the hiring of panel values and misuse of technical systems like not recording SWIFT transactions in the Core Banking System (CBS).