PNB scam: CBI questions RBI ex-Deputy Governor

The CBI today questioned former Deputy Governor of the Reserve Bank Harun Rashid Khan in connection with bank scams involving jewellers Nirav Modi and Mehul Choksi and relaxation of gold import rules in 2014 by the erstwhile UPA government allegedly to the benefit of private traders.

Khan is the senior-most former official of the RBI to be questioned by the CBI in connection with the USD 2 billion scam in Punjab National Bank, considered the biggest in the financial history of the country, they said.

The sources said his questioning revolved around the policy framework of the time when fraudulent Letters of Undertaking (LoUs) were issued by Punjab National Bank (PNB) to the firms of Modi and Choksi.

He was also questioned on the '20:80' gold import scheme, which was cleared by then finance minister P Chidambaram on May 13, 2014, barely three days before the counting of votes of the general election, they said. The scheme had allegedly helped Choksi's company and a few other make windfall gains.

After questioning the PNB top brass, the agency has now shifted its focus to the policies which could have been exploited by Modi and Choksi to further their alleged cheating.

The agency did not reveal the nature of Khan's questioning.

Khan was promoted from within the ranks as a deputy governor on July 1, 2011, and reappointed in July 4, 2014 for two more years.

He was in charge of financial markets, internal debt management departments, foreign management among others at the central bank.

The CBI had questioned three Chief General Managers and one General Manager of the Reserve Bank of India (RBI) yesterday in connection with the case, agency officials said.

They said the questioning of Khan was a continuation of the examination of other RBI employees yesterday.

The four officials were asked questions related to the UPA government's gold import scheme.

The RBI sources said that its officials are routinely "consulted" by other probe agencies and regulators to provide "clarity" on banking and other related policy matters under the central bank's domain and the same has been the case in the present matter.

The CBI investigation into the matter came four weeks after the NDA government had issued a statement saying it would act against people who relaxed gold import rules for private trading houses during the previous dispensation.

The BJP-led NDA came to power at the Centre, defeating the UPA in the 2014 election.

In a statement, the government had said the UPA government's '20:80 scheme' resulted in a windfall of Rs 4,500 crore to 13 trading houses in six months.

The BJP had last month accused Chidambaram of aiding jewellers Nirav Modi and Mehul Choksi, the main accused in the Rs 12,600-crore fraud at Punjab National Bank, through the 20:80 gold import scheme.