The buck stops here: PNB

Bank has capability, capacity to deal with the issue: CMD

Punjab National Bank (PNB) said on Thursday it has the capability and capacity to recover after uncovering a staggering $1.77 billion fraud at its Mumbai branch.

“This cancer that’s been going on since 2011, we have brought it out and we are resolving it,” PNB’s Chief Executive Sunil Mehta said at a press briefing, adding that the bank would honour all its commitments.

“If the entire onus is on us, we will take responsibility,” Mehta said, adding the bank has taken action to book culprits and protect its financial interests.

“In the last 123 years, we have seen many ups and downs. The bank in its full capacity will take every action to book wrongdoers.We are known for clean banking. The fraud started in 2011. We have brought it under the notice of regulatory and law enforcement agencies as soon as we came to know about it. We will not spare anyone involved in the fraudulent practice,” Mehta told reporters.

The Rs 11,515 crore fraud had been going on since 2011 at the Brady House branch of the bank but could only be detected on January 25 this year, the PNB chief said, adding that it was reported to the investigative agencies, including the Central Bureau of Investigation (CBI), on January 29.

“We have issued advisory as well to them. We were the first to inform markets regulator Securities and Exchange Board of India (Sebi) about this under the disclosure norms. So all these things are as per our clean banking agenda,” Mehta added. The bank said Nirav Modi, a billionaire jeweller and diamond merchant it believes to be at the centre of the fraud case, has so far not come up with any concrete plan to repay PNB. The bank said it has asked Modi to come up with a formal repayment plan.

He said the government was monitoring the case on day-to-day basis. “The bank has the capability and capacity to come out of this situation.” The top PNB official, however, refrained from providing details as the investigations were going on. He asserted that action will be taken against all those involved, irrespective of their seniority.

PNB has said that two junior officials at one of its branches in Mumbai had illegally issued “letters of undertaking” to get overseas branches of other lenders to extend credit to “a few select account holders,” most notably firms with ties to Modi, who runs a diamond jewellery business.

In the last 123 years, we have seen many ups and downs. The bank in its full capacity will take every action to book wrongdoers