The branch is in the spotlight after Rs 12,636 crore scam using letters of undertaking (LoUs) was unearthed last month.
Eight former managers who headed Punjab National Bank's Brady House branch in Mumbai are in the dock with various CBI and vigilance cases being investigated against them.
The branch is in the spotlight after Rs 12,636 crore scam using letters of undertaking (LoUs) was unearthed last month.
The former branch managers include Archana Bhargava, former chairman and managing director of Kolkata-based United Bank of India, who is under investigation by CBI for having disproportionate assets.
The others under CBI investigation are Rajesh Jindal (arrested for the Nirav Modi case), SAR Zaidi (under CBI investigation for loans sanctioned to Zoom Developers), Srikanth Sharma (suspended in Nirav Modi case), P K Varun (dismissed from the serivce of the bank for irregularity in sanctioning various loans), Virendra Singh (under suspension in Nirav Modi case), D C Sharma (had a vigilance case against him for loan sanctions) and Roy Choudhury (being investigated by CBI in the Rajat Pharmachem loan case).
Meanwhile, DNA Money has learnt that an additional loss of Rs 1,300 crore from the original fraud disclosure of Rs 11,400 crore by the senior management of Punjab National Bank (PNB) is due to letters of undertaking (LoUs), sanctioned to diamond billionaire Nirav Modi and his maternal uncle Mehul Choksi, being inflated in the SWIFT messaging system.
PNB's Brady House branch in Mumbai issued a set of LoUs which were recorded in the core banking solution system of the bank, but inflated in the SWIFT system, a source said. Cross-border transactions are facilitated through the SWIFT infrastructure which works on a system of codes.
On February 27, PNB informed the stock exchanges that the fraud amount could go up by Rs 1,300 crore. Prior to this, the bank had estimated the fraud to be about Rs 11,400 crore.
"It is this divergence in figures between the core banking solution and the SWIFT system that resulted in the increase in the fraud amount," said the source.
A detailed email questionnaire was sent to Sunil Mehtachairman and managing director of Punjab National Bank, and to Brahmaji Rao, executive director of the bank. Messages were also sent to their mobile phones, but did not elicit any response till the filing of this report.
Brady House is the mid-corporate branch of PNB, located in the upmarket Horiman Circle area in South Mumbai. It is now infamous for its dubious loan disbursals and issuance of LoUs. Located a stone's throw away from the Reserve Bank of India (RBI) headquarters on Mint Street, the branch today has earned the tag of being a den for corrupt officials where loans were sanctioned arbitrarily and without checking the credentials of the customers.
Coming under the glare of investigating agencies, employees in the brand are under stress. The branch, however, is functioning as normal, with the only difference being that many customers are being turned away as audits are going on. CBI had also raided the branch on a Sunday for a few hours.
When DNA Money visited the branch, an employee said, "All employees are stressed out and sleeping only for a few hours. We work late as we are trying to supply all the information that the investigative agencies are asking us to submit."
In its annual financial inspection report of PNB in 2014-15, RBI stated that auditors are frequently changed, which is not in the interest of the bank. However, the central bank failed to act as to why the auditors kept moving out.
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