Allahabad Bank may show CEO the door

The government on Monday said it has initiated action for removal of Allahabad Bank CEO Usha Ananthasubramanian and two executive directors of Punjab National Bank following the CBI's first chargesheet in the $2 billion fraud at PNB detailing their role.

The PNB board on Monday divested its two executive directors, K V 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 managing director 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. Kumar said there is a set process for removal and dismissal of directors from the board of banks and that has been initiated.

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. The PNB board convened an emergency meeting on Monday 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.