PNB Scam: The agency indicted Gokulnath Shetty and his wife for corruption (File)
New Delhi:
The CBI has filed a new complaint against Gokulnath Shetty, the deputy director of the National Bank of the Punjab who allegedly helped Nirav Modi and Mehul Choksi carry out a fraud of Rs 13,000 crore, and his wife for amassing disproportionate assets of a worth 2.63 crore, officials said on Friday.
The agency indicted Mr. Shetty and his wife Asha Latha Shetty, an employee of the Bank of India, on corruption charges for accumulating assets worth more than Rs 4.28 crore during the period 2011 -2017, when the scam was carried out at the Brady House branch of PNB Mumbai where he was assigned, they said.
Out of total assets, CBI alleged that it could not provide a satisfactory explanation for assets worth Rs 2.63 crore, which were 2.38 times disproportionate to their sources of income. known.
The CBI looked into the relationship between Mr. Shetty and Mr. Modi-Choksi during which it dug out the assets amassed by the retired deputy director, they said.
The agency registered a separate FIR in November 2018 against Mr Shetty and his wife to examine their assets.
It appeared that, against an actual income of Rs 72.52 lakh over a period of six years, Mr Shetty’s couple had assets in their name and that of their family members mainly in the form of apartments in Mumbai, the CBI alleged.
In its indictment recently filed in a special court in Mumbai, the agency said it purchased an apartment worth 46.62 lakh in Goregaon while paying the advance booking amount for three other apartments in various localities of Mumbai and neighboring regions.
In addition, the agency also detected fixed deposits, bank balances and recurring accounts of over Rs 75 lakh.
After calculating the investments, income and expenses, the CBI concluded that Mr Shetty and his wife would have accumulated disproportionate assets to the tune of Rs 2.63 crore in 2011-17, they said.
The CBI has already filed indictments against Mr. Modi and Mr. Choksi in which the role of Mr. Shetty, currently in custody, is entrusted, they said.
Mr Shetty, who allegedly played a key role in the Rs 13,700 crore loan fraud while working as a deputy manager at PNB’s Brady House branch in Mumbai, was arrested in March 2018.
The scam surfaced when the companies owned by Mr. Modi and Mr. Choksi approached the Brady Road branch in January 2018, after Mr. Shetty retired in 2017, requesting the renewal of the letter from commitment (LoU) for payments to suppliers.
Mr Shetty, then deputy manager of the Brady House branch of the PNB, had remained at the same headquarters for seven years and had issued fraudulent LoUs with “impunity”, alleged the CBI.
It is alleged that Mr. Shetty, although a junior officer, had a much higher level of authorization than his position, which gave him full powers in Finacle, internal software used by PNB to verify large transactions.
It is alleged that Mr. Shetty circumvented PNB Finacle’s core banking system and fraudulently issued LoUs, they said.
Investigations revealed that messages for fraudulent LoUs were sent to foreign banks by misusing the international messaging system for banks known as the SWIFT platform and without subsequently entering Finacle, thus bypassing any examination of these funds in the bank, they said.
A LoU is a guarantee that is given by an issuing bank to Indian banks with branches abroad to provide short-term credit to the applicant.
In the event of default, the issuing bank of the LoU must pay the debt to the lending bank with accrued interest.
The companies of MM. Modi and Choksi took out loans from banks abroad on the basis of these LoUs but did not repay them by transferring the debt to PNB.
It is alleged that senior PNB officials, including the then CEO and Managing Director, failed to implement the circulars and warnings issued by the Reserve Bank of India regarding safeguarding the functioning of SWIFT and distorted the factual position at the RBI.
The reconciliation of the CBS and SWIFT messages was not made despite caveats and repeated questionnaires from RBI circulars, the CBI alleged. banking system called the SWIFT platform and without making their subsequent entries into Finacle, thereby bypassing any scrutiny of those funds in the bank, they said.
A LoU is a guarantee that is given by an issuing bank to Indian banks with branches abroad to provide short-term credit to the applicant.
In the event of default, the issuing bank of the LoU must pay the debt to the lending bank with accrued interest.
The companies of MM. Modi and Choksi took out loans from banks abroad on the basis of these LoUs but did not repay them by transferring the debt to PNB.
It is alleged that senior PNB officials, including the then CEO and Managing Director, failed to implement the circulars and warnings issued by the Reserve Bank of India regarding safeguarding the functioning of SWIFT and distorted the factual position at the RBI.
The reconciliation of the CBS and SWIFT messages was not made despite caveats and repeated questionnaires from RBI circulars, the CBI alleged.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
