After being hit by nearly Rs 12700 crore fraud, Punjab National Bank (PNB) on February 27, 2018 appointed its general manager A K Pradhan as the Group Chief Risk Officer.
However, the bank did not disclose the functions and responsibilities of the Group Chief Risk Officer.
On February 14, 2018, the Punjab National Bank detected the fraud wherein jeweller Nirav Modi and associates allegedly cheated the bank by acquiring fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders. The fraud was estimated at Rs 11400 crore.
However, recently on February 26, 2018, it was found that the amount of fraud in Nirav Modi case was revised to Rs 12700 crore.
Nirav Modi, who figured in Forbes India's Richest People List in 2016 with a net worth of USD 1.74 billion, is already being investigated by the CBI for alleged fraud involving Rs 280 crore at a PNB branch.
Besides him, three other jewellers, Gitanjali, Ginni and Nakshatra are also under the scanner with the CBI. The Enforcement Directorate is looking at their arrangements with various banks and end use of the money.
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Finance ministry's directions for banks
Considering the Nirav Modi fraud case, the Union Finance Ministry had asked all the state-owned banks to examine all their Non-Performing Accounts (NPAs) of over Rs 50 crore for possible fraud and accordingly report the matter to probe agency Central Bureau of Investigation (CBI).
The Ministry also asked the banks to come up with a pre-emptive risk mitigation action plan within 15 days to check recurrence of frauds.
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