New Delhi, Scam-hit Punjab National Bank (PNB) today said cricketer Virat Kohli continues to be its brand ambassador and denied reports that it has engaged audit firm PricewaterhouseCoopers (PwC) to investigate the Rs 11,400 crore fraud committed on the state-owned lender by diamond jeweller Nirav Modi and his associates.
The bank has also said in a statement that it has not imposed any withdrawal limits on its customers and normal banking activities are going on. “Mr Virat Kohli is our brand ambassador,” the bank said, denying media reports that he is going to discontinue his endorsement with the bank. “The same is again totally false and incorrect,” it added.
The bank also said that it has not engaged PwC to conduct an investigation into the alleged fraud and gather evidence against Nirav Modi and his associates. The media report is “totally incorrect”, it added. On the reports floating on the social media and other platforms that the bank has imposed a withdrawal limit of Rs 3,000 per customer, Punjab National Bank said: “It is absolutely incorrect, no such limit has been fixed by the bank and normal banking activities are going as usual.
“No restrictions on the withdrawals have been imposed by the bank,” it clarified. Further clarifying on news that the Reserve Bank and the government have asked the bank to make payment to the fraudulent amount to other banks, it said: “The report is totally incorrect and the bank confirms not having received any such instructions.”
It also said that the report about 18,000 transfers done by the bank recently is far from facts and only 1,415 transfers of its employees has been effected as per its extant transfer policy. “The work in the branches is going on smoothly and the above transfers are in no way affecting the customer service in the Bank.” PNB reiterated that it has the capacity and capability to handle the situation and protect the interest of the institution, customers and stakeholders.
“Bank has already initiated prompt steps for protecting the financial interest of all the lenders/ stakeholders including issuance of advisory to lenders involved and to act swiftly to recover the dues,” it said further. It also reaffirmed that the bank is committed to honour all bonafide commitments.
“In pursuant of Clean and Responsible Banking agenda of the government, bank has taken proactive steps to bring the culprits to the books and has initiated strong action against the entities and the staff involved,” PNB said. Separately, industry body CII has condemned the malfeasance by unethical enterprises and stressed to bring down government holding in banks to 52 per cent and then gradually to 33 per cent to increase wider private participation.
“The current episode of financial fraud shows gaps in supervision and monitoring systems at the bank level which have the potential to become disruptive for the industry and the financial sector both,” Chandrajit Banerjee, Director General, CII, said in a statement.
“CII condemns such malfeasance by unethical enterprises, which are allegedly perpetrated in consort with certain corrupt employees of the affected banks.” The industry body has suggested to enhance supervision and monitoring at all levels, infusion of professionalism in bank’s management and dilution of government stake in public sector banks (PSBs) to bring them down to 52 per cent in the first phase and then further reduce to 33 per cent.
Government should consider lowering its stake in Public Sector Banks and increasing the equity spread through wider private participation. This should be accompanied by consolidation of PSBs to result in fewer but stronger institutions of global scale, CII said. “CII strongly feels that the current episode of malfeasance calls for focus and facilitation by the regulator to improve monitoring and supervision at the bank level. On its part, CII will continue to work on corporate governance at the enterprise level to inculcate ethics and values as part of DNA of business practices,” Banerjee said.
Punjab National Bank last week had informed about a scam of Rs 11,400 crore that had been happening in connivance with a few bank officials since 2011 to issue fake letters of undertakings (LOUs) to diamond merchant Nirav Modi and his associates for loans from foreign branches of other banks.
PNB has already filed an FIR in this regard and multi-probe agencies are investigating the matter including the Enforcement Directorate and CBI.