Chennai : Only the naive would believe that just two officials were involved in the $1.8 billion fraud in PNB and that the whole bank was in the dark for the past seven years, said a top leader of a bank union.

He also asked the PNB management to reveal what kind of due diligence was done on diamond trader Nirav Modi and his companies before extending a loan of Rs 1,700 crore.

“The PNB management has to clarify what kind of due diligence it had done while lending to Modi’s firms a sum of Rs 1,700 crore,” C H Venkatachalam, General Secretary, All India Bank Employees’ Association (AIBEA) said.

The industry body Assocham criticised the functioning of public sector banks and questioned its “vulnerable” position in a first reaction by any chamber of commerce to the fraud.  “Alleged fraudulent transactions worth Rs 11,300 crore from a single branch of PNB with the connivance of the junior official(s) shows how vulnerable the Indian banks, especially those in the public sector have become, with a dangerous potential contagion in the country’s financial system,” a statement by Assocham said.

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