• Register
Return to: Home > News > Regulation > Indian institute call for actions over alleged fraud at state-run bank

Indian institute call for actions over alleged fraud at state-run bank

Following the alleged fraud of state-run Punjab National Bank (PNB), which came to light 14 February this year, the disciplinary directorate of The Institute of Chartered Accountants of India (ICAI) has launched an investigation, urging PNB, the Securities and Exchange Board of India (SEBI), the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) to share details of reports and findings in regards to the alleged frauds.

The alleged fraud took place at a single Mumbai branch of PNB and pertains to a number of bank guarantees issued by the bank to jewellery companies owned by Nirav Modi and his uncle, Mehul Choksi, so that they could arrange loans from overseas lenders.

The fraud is said to be in the region of $2bn and to have been actioned by a small number of employees based at the Brady House branch in Mumbai.

The ICAI has set up a group to study the issues in PNB bank matter and suggest remedial measures and improvements in the banking system.

The first meeting of the group took place on 23 February were officers of PNB were called to produce copies of all related documents to the alleged fraud.  The general manager of PNB, Western Zone, appeared and made a statement in Mumbai.

The Directorate of Discipline of ICAI has issued show cause notice to all central statutory auditors of PNB and the auditors of Gitanjali Gems Limited, of which Choksi is the chairman, to take action against those members of ICAI who were potentially involved in the fraud at PNB.

In 2017, the central government of India appointed a high level committee (HLC) comprising of government nominee members of the disciplinary committee of the ICAI, The Institute of Company Secretaries in India (ICSI) and The Institute of Cost Accountants of India (ICoAI) to suggest amendments to The Chartered Accountants Act, 1949 for strengthening the disciplinary and oversight mechanism of all three Institutes.

The ICAI has said that until the disciplinary inquiry is concluded, and the role of all those involved, it would not be ‘prudent’ to draw any conclusion against the accountancy profession within India.


By Joe Pickard

Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.