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Another Nirav Modi-style fraud at PNB; bank cheated of Rs 169 crore

Source: PTI
December 23, 2022 08:00 IST
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The CBI has registered an FIR against an officer of Punjab National Bank (PNB), now suspended, for allegedly cheating the state-run lender to the tune of Rs 168.59 crore through 34 fake bank guarantees, officials said Thursday.


Photograph: Francis Mascarenhas/Reuters

Nearly four years after LoU (letter of undertaking) scam allegedly perpetrated by uncle-nephew duo of Mehul Choksi and Nirav Modi bled the PNB to the tune of about Rs 13,000 crore, bank official Priya Ranjan Kumar followed similar modus operandi to issue 34 fake bank guarantees without making any entries in its core banking system Finacle, according to the CBI FIR.

"As per the interim investigation report dated November 27, 2022, it emerges that the fraud has been perpetrated by the bank staff in collusion with some unknown persons through illegal and unauthorized usage of the bank's systems.


"Further, the aforesaid fake bank guarantee has no record in the Finacle system of the bank," the FIR alleged.

The new scam came to light when Kohima branch of Canara Bank sent intimation to Parliament Street branch of the PNB on November 18 for the invocation of Rs 5.70 crore bank guarantee purportedly issued by the latter.

The guarantee was signed by two PNB employees, including the then branch manager Priya Ranjan Kumar, now suspended, and A Venkatesan who had already resigned from service when scam came to light, the CBI said.

The agency has also named Elangbam Ranananda, Heyee Global Enterprises in Noida, Uttar Pradesh, and MD Enterprises based in Andhra Pradesh in the FIR.

Kumar allegedly used Structured Financial Messaging System (SFMS) to intimate Canara Bank about the bank guarantee but did not enter the information in the Finacle system of the PNB.

The PNB had reported the biggest banking scam in 2018 saying companies owned by Choksi and Modi had siphoned off Rs 13,000 crore by using the LoUs issued by the bank which were not entered in core banking system by its conspiring staff to avoid scrutiny.

Now the bank has detected 34 such entries in the bank's SFMS system at Branch Office Sansad Marg, New Delhi and branch office Arrah Chowk, Arrah (Bihar) issued by Kumar using an invalid messaging format MT 799 for confirmation of issuance and extending fake bank guarantees through the system, the FIR alleged.

"There is no record of these 34 entries SFMS messages in bank's finance system and no such bank guarantees were ever issued by the bank in respect of these fraudulent advices/confirmations in invalid format, through MT 799 (Free Format Message) instead of the prescribed MT 760," the complaint filed by PNB, now part of the FIR, alleged.

"It was alleged that accused in conspiracy with others through illegal & unauthorized usage of the bank's system, issued 34 fake bank guarantees, thereby causing loss to PNB for total amount of Rs 168.59 crore (approx)," the CBI has said in a statement.

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