PNB ex-CEO Usha Ananthasubramanian summoned by Delhi Court in complaint by RBI after PNB scam

The Court of Metropolitan Magistrate, Delhi has summoned former Managing Director & CEO of Punjab National Bank Usha Ananthasubramanian and 11 other PNB officials for alleged violations of Section 46 of the Banking Regulation Act..The summons were issued in a complaint by the Reserve Bank of India against the backdrop of the multi-crore PNB scam that broke in January 2018..The other proposed accused in the case include PNB through its current Managing Director & CEO Sunil Mehta, former Executive Director RS Sangapure and former General Managers Rakesh Kumar and Nehal Ahad, among others. (PNB scam).As per the order, all proposed accused persons shall appear before the Court on May 24, 2019..The order was passed by Judge Dharmender Singh earlier this month..“In view of the facts stated in the complaint and documents filed on record on behalf of complaint, case is made out for summoning of all the proposed accused persons in respect of offences u/s 46 of Banking Regulation Act, 1949, so, they be summoned on filing of PF/RC for NDOH i.e. 24.05.2019.”, the order reads..RBI was represented by Senior Advocate Mahesh Jethmalani with Advocates Ramesh Babu, Mugdha Pande, Swati Sethia and Ravi Sharma..It is RBI’s case that all the accused persons deliberately furnished false and misleading statements to it, which was done with common intention and in connivance with each other. The conduct, RBI claims, is in violation of Section 46 of Banking Regulation Act and Section 120B of the Indian Penal Code, 1860..The Court was informed that on August 3, 2016, RBI had issued a “confidential circular” to all scheduled commercial banks advising them to strengthen the controls around the operating environment for fund transfers through SWIFT or similar interfaces. The banks were then advised to minimize the practice of direct creation of payment messages in the SWIFT environment with routing the same through Core Banking System (CBS)..RBI further submitted that in 2016, it sought a report from PNB with respect to the “systems and procedures of Information Technology aspects being followed” by it. The accused officials of PNB, however, submitted a false compliance/action taken report. This report was prepared, authorized and personally approved by other accused officials, it said. (PNB scam).The same false statements were made again in June 2017 in response to a status report sought by the Deputy General Manager of the RBI’s Department of Banking Supervision..RBI has claimed that it discovered “the falsity of information” provided by the accused persons while scrutinizing PNB’s Brady House Branch in Mumbai, in the aftermath of the PNB scam..RBI found that PNB’s Core Banking System was not integrated with many critical applications and that there was no online integration of SWIFT with CBS. (PNB scam).RBI, therefore, submitted that the proposed accused persons “willfully made false statements despite being aware of the risks and repercussions of failing to integrate SWIFT with CBS and introducing STP between SWIFT messaging and CBS“..Information furnished by PNB in the last few years was completely false and made in “utter disregard to the statutory obligations under Section 46”, RBI argued. (PNB scam).After hearing RBI, the Court issued summons to all the accused in the complaint..Read the order: