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Government dismisses Allahabad Bank CEO Usha Ananthasubramanian from service

Aug 14, 2018 15:52 IST
    Government dismisses Allahabad Bank CEO Usha Ananthasubramanian from service
    Government dismisses Allahabad Bank CEO Usha Ananthasubramanian from service

    The Union Government on August 13, 2018 dismissed Usha Ananthasubramanian, former CEO/ MD of Allahabad Bank and scam hit Punjab National Bank (PNB), from service.

    Though the Allahabad Bank had divested Ananthasubramanian of all her powers as MD three months back, after she was named in the CBI charge-sheet in the Rs 14,000 crore PNB fraud case, she had continued to be an employee of the bank.

    She was dismissed from service on the day when she was supposed to superannuate.

    Reason

    The government dismissed Usha Ananthasubramanian as MD and CEO of Allahabad Bank, saying it was needed to secure the interest of the public sector bank, which she had led from May 2017.

    Key Highlights

    Ananthasubramanian had held top leadership roles in PNB in two separate terms. First, she was the executive director at PNB from July 2011 to November 2013.

    She later served as the bank’s CEO and Managing Director from August 2015 to May 2017, before moving to Allahabad Allahabad.

    According to a formal notification issued by the Centre, the Department of Financial Services had consulted the Board of Allahabad Bank before taking the decision of Ananthasubramanian’s removal.

    Besides dismissing her from service, the government has given permission to the CBI to prosecute her and former PNB Executive Director Sanjiv Sharan.

    The removal action comes in the wake of her having failed to exercise proper control over PNB ’s functioning while serving as its MD & CEO that had enabled misuse of SWIFT at PNB's Brady House branch leading to one of the country’s biggest bank frauds.

    About Usha Ananthasubramanian

    In her 34-year-long career, besides helming the top posts at PNB and Allahabad Bank, Ananthasubramanian has also worked as the CMD of the Bharatiya Mahila Bank, India’s first women’s bank that was merged with the SBI in April 2017.

    In 2018, she became the first woman to be elected as the chairman of the Indian Banks' Association, the 71-year old industry body for banks.

    She began her carrier in banking with Bank of Baroda, where she worked as a Specialist Officer in February 1982.

    She was closely associated with the transformation project of Bank of Baroda including rebranding and innovative HR initiatives.

    In PNB, she also served as the Chairman of the Board of Punjab National Bank (International) Limited from January 2016 to May 2017 and PNB Housing Finance Limited from August 2015 to May 2017.

    She served as the Chairperson at PNB Gilts Ltd. from September 2015 to May 2017.

    She has also served as a Director of Export-Import at Bank of India from November 2015 until May 2017.

    Background

    India’s Punjab National Bank (PNB) on February 14, 2018 stated that it has detected fraudulent transactions worth over Rs 11,300 crore at its Mumbai branch for the benefit of a few select account holders with their apparent involvement.

    The bank lodged two complaints with the Central Bureau of Investigation (CBI) against billionaire jewellery designer Nirav Modi and a jewellery company about fraudulent transactions.

    Jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a PNB branch in Mumbai to secure overseas credit from other Indian lenders.

    In fact, the Mumbai branch of PNB had fraudulently issued LoUs for a group of companies belonging to Modi since March 2011. The total number of LoUs issued to the companies of Nirav Modi, his relatives and the Nirav Modi Group amount to 1,213.

    PNB paid Rs 6,586.11 crore to other banks to discharge its liabilities towards LoUs and foreign letters of credit issued fraudulently and in unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank.

     

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