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The Central Vigilance Commission (CVC) on Monday asked the Punjab National Bank (PNB) and Ministry of Finance officials to submit a report on how the scam took place, despite monetary regulations being in place.
CVC has given the bank 10 days to prepare and submit the report.
Earlier, officials from PNB, Reserve Bank of India (RBI) and Department of Financial Services gave a two-hour long presentation to CVC about the case.
The law enforcement agency has asked for names of officials who were involved in the scam and sought identification of officials who could have taken action and prevented it.
CBI told CVC that it was a system failure at multiple levels.
For the unversed, Punjab National Bank detected a $1.77 billion scam in which jeweller Nirav Modi acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders.
The scam was started in 2011 and was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies.
Meanwhile, the PNB filed a second complaint with the CBI on February 13.
The CBI had received the complaint from PNB on January 28 and a case was registered in the case on January 31.