Citing RTI Clause, PNB Won't Give Details Of Audit That Uncovered Fraud

Replying to an RTI query, Punjab National Bank (PNB) declined to give a copy of the inspection reports on the scam involving Nirav Modi and others

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Citing RTI Clause, PNB Won't Give Details Of Audit That Uncovered Fraud

PNB scam: Punjab National Bank has accused Nirav Modi, Mehul Choksi and others of fraud


New Delhi:  State-run Punjab National Bank has declined to give details of the audit that led to the detection of over Rs 13,000 crore fraud at the lender, citing a clause that bars any disclosure that may harm investigation.

Replying to a query filed under the Right to Information (RTI) Act, the public sector bank also declined to give a copy of the inspection reports on the scam involving billionaire jeweller Nirav Modi, his uncle Mehul Chokshi and others.

Since the matter is under investigation, the bank cannot reveal the contents of the audit, PNB said in its reply to the RTI query filed by news agency Press Trust of India.

The RTI application specifically asked for details of the inspection that uncovered the PNB fraud.

Apart from the Central Bureau of Investigation (CBI), the income tax department and the Enforcement Directorate, the Reserve Bank of India (RBI) has started its own probe into the scam.

On May 13, the RBI also declined to share details of the inspection reports on the scam-hit PNB citing RTI clauses that bar disclosure of details which may harm investigation. The central bank has, however, clarified that it does not carry out audit of banks, but conducts risk-based supervision of banks.

The capital markets regulator Securities and Exchange Board of India (SEBI) recently wrote to PNB, warning it of delay in disclosing details about the fraud involving Nirav Modi. The SEBI said the delay by PNB ranged from one to six days in letting the stock exchanges know about reports and complaints with the RBI and the CBI.

Earlier this week, the CBI filed two charge sheets in the PNB fraud case in a Mumbai court. The CBI alleged that PNB misled the RBI on giving credit guarantees, which are at the centre of the controversy. With a letter of undertaking or LOU, a bank can let customers raise money from another Indian bank's foreign branch in the form of a short-term credit.

The LOU serves the purpose of a bank guarantee for a bank's customer for making payment to its offshore suppliers in foreign currency.

On Tuesday, PNB said its total liability is Rs 14,356.84 crore due to the fraud.

With inputs from PTI


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