PNB fraud: Allahabad Bank says Ananthasubramanian ceases to be MD & CEO

Usha Ananthasubramanian was heading PNB before taking charge of Allahabad Bank

State-owned Allahabad Bank on Tuesday said Usha Ananthasubramanian no longer heads the bank following the Finance Ministry directive on Monday to remove her from the post. 

"We have to inform you that the Ministry of Finance, Department of Financial Services vide notification dated August 13, 2018, has notified that...in exercise of powers under Section 9 of the Banking Companies Act, 1970, the central government hereby removes Usha Ananthasubramanian, from the office of Managing Director and Chief Executive Officer of Allahabad Bank, with immediate effect," the bank said in a regulatory filing.

Accordingly, Usha Ananthasubramanian has ceased to be the MD&CEO of the bank with effect from the date of aforesaid government notification, it said.
 

She was divested of her powers as the head of the bank three months ago as a fallout of the Rs 140 billion (Rs 14,000 crore) fraud at Punjab National Bank (PNB) after being named in the probe agency CBI's chargesheet.

Ananthasubramanian was heading PNB before taking charge of Allahabad Bank. 

She had enjoyed leadership roles in PNB in two stints. She headed the bank between August 2015 and May 2017.

She was PNB executive director at the bank from July 2011 to November 2013.
 

It is alleged that Ananthasubramanian failed to exercise proper control over the functioning of PNB while serving as MD of the bank. It enabled the fraud in the bank through misuse of SWIFT at PNB's Brady House branch.

Jeweller Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 140 billion (Rs 14,000 crore) through the issuance of fraudulent letters of undertaking. A Mumbai branch of PNB had fraudulently issued LoUs for the group of companies belonging to Modi since March 2011.
 

Allahabad Bank also reported a net loss of over Rs 19.44 billion (Rs 1,944 crore) in the first quarter ended June due to higher provisioning for bad loans. There was a net profit of Rs 290 million (Rs 29 crore) in bank's balance sheet in the first quarter of 2017-18. 

The stock of the bank tumbled over 6 per cent to close at Rs 40 on BSE.