CVC blames RBI for PNB fraud

Apportioning blame to the Reserve Bank of India (RBI) over the PNB loan fraud, Central Vigilance Commissioner K V Chowdary on Tuesday said there had been "no apparent audit" by the central bank during the period of the scam. Chowdary stressed the need to put into place a more robust auditing system.

"They did not do this (an audit)," the head of the probity watchdog said.

The CVC exercises superintendence over the CBI which is looking into the over Rs 13000-crore PNB fraud case. The RBI had the regulatory responsibility for the banking sector but any lack of integrity would be looked at by the Central Vigilance Commission, he added. Chowdary said according to the RBI it had switched over from a periodic audit to a "risk-based" audit which is conducted when there is a financial risk involved. "To determine risk, they must have some parameters. Based on that they would have done that (auditing). (But) there was no apparent audit by the RBI during this period (of fraud)," Chowdary said.

Meanwhile, the government has asked PNB and probe agencies to share details of the scam with chartered accountants' apex body Chartered Accountants of India, which is looking into the systemic issues related to the fraud, an official said. The 10-member panel is awaiting more information, ICAI President Naveen N D Gupta said on Tuesday.

ED to arrest Gokulnath Shetty

A court on Tuesday allowed the Enforcement Directorate (ED) to take the custody of a former PNB official, arrested earlier by the CBI in connection with the fraud, involving diamantaire Nirav Modi. "The court has allowed our application. Now, we will arrest former deputy general manager of PNB Gokulnath Shetty, a key accused," special ED prosecutor Hiten Venegaonkar said.