PNB fraud: 15 days deadline to fix operational gaps, says finmin to senior bank officials

PNB fraud: The finance ministry (finmin) on Tuesday set a 15-day deadline for public sector banks to take pre-emptive action against operational and technical risks, following nearly Rs 13,000 crore fraud at the Punjab National Bank (PNB), the country's second-biggest public lender.

"State-run banks have 15 days to take pre-emptive action and identify gaps/weaknesses to gear up for rising operational and technical risks," said Rajeev Kumar, secretary in the department of financial services in a tweet.

Besides fixing "clear accountability" of senior officials, the banks must also learn from best practices and pinpoint strategies including technical solutions, Kumar added.

15 day deadline for PSBs to take pre-emptive action & identify gaps/Weaknesses to gear up for rising Ops & Tech risks; To learn from best practices & pinpoint strategies including tech solutions; Clear accountability of senior functionaries.#EASE @PMOIndia @FinMinIndia @PIB_India pic.twitter.com/tankAMtBem

— Rajeev kumar (@rajeevkumr) February 27, 2018

The fraud-hit PNB, late night on Monday, informed bourses that the amount of fraudulent transactions involving the bank could go up by over Rs 1,300 crore in the scam related to diamond trader Nirav Modi and owner of Gitanjali Gems, Mehul Choksi.

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"In continuation to our filing with stock exchanges on February 14, 2018, we have to inform that quantum of reported unauthorised transactions can increase by $204.25 million," PNB said in a filing to BSE.

At the current exchange rate, the amount comes to around Rs 1,323 crore.

Earlier, PNB had detected a $1.8 billion fraud in the Brady House Branch in Mumbai.

The Central Bureau of Investigation on Monday said it questioned PNB Executive Director KV Brahmaji Rao, two General Managers and a retired official in connection with its probe into the multi-crore fraud.

The Income Tax Department also said it had attached 66 more bank accounts related to accused Choksi.