How Did PNB Scam Take Place Despite Regulations?

The Central Vigilance Commission (CVC) on Monday asked the Punjab National Bank (PNB) and finance ministry officials to submit a report on how the Rs 11,300-crore scam+ took place despite several monetary regulations in place. The CVC has given the bank 10 days to present the report.

Earlier in the day, senior PNB and finance ministry officials had a meeting with the CVC in connection with the fraud case. The officials gave a two-hour long presentation to the vigilance body.

The commission has asked for the names of officials who were involved in the fraud and identity of those who could have taken timely action and prevented it. The CVC also had a meeting with CBI officials during which the commission was told that it was a system failure at multiple levels. The commission exercises superintendency over the CBI in corruption-related matters.

The CBI has registered two FIRs – one on January 31 and another a few days ago – against billionaire diamond merchant Nirav Modi, his relative Mehul Choksi of Gitanjali Gems and others for allegedly defrauding PNB of about Rs 11,400 crore Meanwhile, PNB has said that it will honour all its “bonafide commitments” under the Letters of Undertaking (LOUs) and Foreign Letters of Credit (FLCs) in connection with the fraud.

“We will honour all our bonafide commitments under LoUs and FLCs as per law of the land and as per specific existing guidelines of regulator i.e. RBI on LOUs and FLCs.,” the country’s second largest lender said in a notice posted on its website.

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