Govt sacks Allahabad Bank chief Ananthasubramanian
MD & CEO Usha Ananthasubramanian was due to retire today
Allahabad Bank Managing Director and Chief Executive Officer Usha Ananthasubramanian was sacked by the Union government on Monday, her last day before retirement, for her alleged involvement in the ~143-billion Punjab National Bank (PNB) fraud.
Allahabad Bank Managing Director (MD) and Chief Executive Officer (CEO) Usha Ananthasubramanian was sacked by the Union government on Monday — her last day at work before retirement — for her alleged involvement in the ~143-billion Punjab National Bank (PNB) fraud.
In its order, the government said the dismissal action against Ananthasubramanian was taken for “failing to exercising proper control over the functioning of PNB while serving as its MD and CEO”. It said SWIFT, an international messaging system used by banks to sanction loans, was also misused. This enabled the fraud to persist over several years.
The government’s notification for dismissal of her services came after the Central Bureau of Investigation (CBI) sought its sanction for prosecution in the fraud case. Terminating her service is the highest form of action against a public servant. Though it was her last day at work, Ananthasubramanian will not enjoy any retirement benefits, a government official said.
On her last day at work as MD and CEO of Allahabad Bank, Ananthasubramanian had a rather unceremonious exit. Minutes before her planned farewell function at the bank by the employees, she left the bank premises abruptly as news of her dismissal broke.
The government has also given its sanction to the CBI to prosecute Executive Director (ED) Sanjiv Sharan, a finance ministry official said.
Though the CBI has sought permission to prosecute another accused in the case, PNB ED K V Brahmaji Rao, the government is yet to take a call on it. It will soon issue orders to dismiss Sharan from service, the official added.
Separately, the Reserve Bank of India (RBI) is also going to file a criminal case against Ananthasubramanian, Sharan, and former PNB ED Ram S Sangapure, exercising its power under the Banking Regulation Act, 1949, for their involvement in the PNB fraud. The RBI had conducted its own enquiry into the case, in which loans were fraudulently issued,
using letters of undertaking (LoUs), over seven years between 2011 and 2017 to group of diamond companies owned by Nirav Modi and Mehul Choksi. Ananthasubramanian was divested of her functional powers around mid-May this year. However, 10 days later, she had joined back, albeit bereft of all functional powers. Over the past few months, all important decisions were being taken by N K Sahoo and S Harishankar, the two EDs of the bank.
Ananthasubramanian was also absent during the annual general meeting of the bank last month, which was presided over by Sahoo. Ananthasubramanian was MD and CEO of PNB between August 2015 and May 2017 and served as ED at the bank between July
2013 and November 2013. The ~143-billion fraud at PNB took place between 2011 and 2017.
“The government has also given consent to the RBI to take action against Ananthasubramanian, Sharan, and Sangapure. The RBI did not seek permission to take action against Rao. For prosecuting public servants, prior permission from the government is required,” another finance ministry official said.
During Ananthasubramanian’s tenure as MD and CEO, one of the unconventional decisions the bank took was to tap the bank employees to raise capital through employee stock purchase schemes. The bank could raise about ~3.15 billion from the issue.