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False claims: Letter to BS on PNB fraud exposes failure of systems
When even a small account holder receives an sms for every single debit and credit entry in his/her account, how come an institution like PNB didn't get any such debit advice?
Apropos your editorial “Bank vulnerabilities” (February 16), it is just not possible that a fraud of Rs 114 billion would take place just because a junior employee in one of the branches somehow managed to issue false letters of undertaking (LoUs) to overseas branches of several banks. It would indeed be naive to believe that just this action of an employee caused the huge fraud and that no other banks or the Punjab National Bank (PNB) management had any knowledge of what was going on.
Even if a false letter was issued and a certain bank extended payment to the culprit, wouldn’t there be an advice to this effect to the parent bank (PNB) on whose behalf this payment was released? When even a small account holder receives an sms for every single debit and credit entry in his/her account, how come an institution like PNB didn’t get any such debit advice? How come the P&L accounts of successive years did not reflect any of this? Were the banks abroad just giving out advances to Nirav Modi enterprises and not even informing the bank - on whose behest this was being done — or not even asking to be reimbursed for the same?
Such a big fraud, involving several banks, in several countries, over a long period of seven years just could not have happened without the collusion — or at the very least gross criminal negligence — of some senior officers and also auditors of these banks. The fact that all this went on despite the Reserve Bank of India cautioning the banking system makes the fraud even stranger. If it was not a sad case of risk to millions of small depositors, the whole thing sounds like a fairy tale — a laughable work of fiction. The government must act swiftly and award exemplary punishment to all the guilty people. As far as the culprits are concerned, we can safely assume that they will never come back to India.
