Ex-CEO of Allahabad bank granted bail in PNB scam

Mumbai: The former managing director and CEO of Allahabad Bank, Usha Ananthasubramanian, was granted bail by a special CBI court in the Punjab National Bank (PNB) fraud case on Monday. She was earlier the CEO and managing director of the scam-hit PNB. Last week, the CBI informed the special CBI court that the President of India had given his sanction for her prosecution in the case, and the court had thereafter taken cognisance of it.

The government on August 13 dismissed Ananthasubramanian from service. Three months ago, Ananthasubramanian was divested of all her powers as MD of Allahabad Bank, after being named in a CBI charge sheet in the Rs 14,000 crore PNB fraud case. However, she continued to be an employee of the bank.

The PNB fraud case pertains to the use of certain banking instruments to defraud the bank of thousands of crores of rupees. The instruments in question - Letters of Undertaking or LoUs - are used by customers to raise money from a bank’s foreign branches.

Early this year, Ananthasubramanian also became the first woman to be elected as the chairman of the Indian Banks’ Association.

Nirav Modi and Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 14,000 crore through issuance of fraudulent letters of undertaking (LoUs).

The Mumbai branch of the PNB had fraudulently issued LoUs for the group of companies belonging to Modi since March 2011.