trending Market Intelligence /marketintelligence/en/news-insights/trending/q0hmwk54csc7x5fp3vzxkw2 content esgSubNav
In This List

Allahabad Bank says no communication yet on charges against CEO in US$2B fraud

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Allahabad Bank says no communication yet on charges against CEO in US$2B fraud

India's Allahabad Bank said it has not yet received formal communication from government authorities on charges being filed against CEO Usha Ananthasubramanian for his alleged involvement in the US$2 billion fraud at Punjab National Bank.

The bank was responding to a May 14 report from The Times of India that India's Central Bureau of Investigation will submit a chargesheet against Ananthasubramanian and several others in connection with the fraud at Punjab National Bank.

The bank's board will meet May 15 to discuss the matter.

The CBI's chargesheet detailed Ananthasubramanian's role in the scandal, in which unauthorized loans were issued to companies controlled by jeweler Nirav Modi between 2011 and 2017. Ananthasubramanian was the managing director and CEO of Punjab National Bank from 2015 to 2017.

The chargesheet also named Punjab National Bank executive directors Brahmaji Rao and Sanji Saran, and general manager Nehal Ahad. The officials allegedly did not comply with circulars issued by the central bank on the SWIFT control system in 2016.

Separately, the Press Trust of India reported the same day that the government has initiated action to remove Ananthasubramanian after the CBI released its first chargesheet. The CBI is set to file a second chargesheet May 18.

Meanwhile, India's central bank imposed new restrictions on Allahabad Bank as part of the terms of its prompt corrective action framework. Specifically, the central bank asked the lender to lower its exposure to risk-weighted assets, restrict the creation of nonbanking assets, restrict renewing deposits and certificates of deposits, according to a same-day statement.

Allahabad Bank was placed under prompt corrective action, or PCA, framework in January for having high levels of nonperforming assets and negative returns on assets for two consecutive years. The PCA framework is a supervisory tool used by the central bank to facilitate banks to take corrective measures in a timely manner, avoid riskier activities and focus on conserving capital to keep their balance sheets strong.