Money & Banking

PNB board discusses future of EDs Rao, Sharan at special meeting

KR Srivats New Delhi | Updated on July 27, 2018 Published on July 27, 2018

Show cause notices were issued to the two EDs for their termination, and their replies were discussed at the PNB board meeting   -  REUTERS

They were divested of their responsibilities after the ₹13,000-cr Nirav Modi scam came to light

A specially-convened meeting of the Punjab National Bank (PNB) board, on Thursday, discussed the future course of action on the two Executive Directors – Brahmaji Rao and Sanjiv Sharan – who were divested of their responsibilities following the ₹13,000-crore Nirav Modi scam.

“The board meeting was specially convened to discuss the matter of the two EDs. The opinion of the board would be conveyed to the Department of Financial Services,” a PNB official said.

This official, however, declined to comment on the opinion of the board on this matter. The government nominee on the PNB board did not attend the Thursday meeting, sources said.

It may be recalled that the Finance Ministry (Department of Financial Services) had recently asked the board of PNB to give its opinion on the future course of action on these two EDs.

The PNB board, on May 14 this year, based on a letter from the Finance Ministry, swung into action to divest both Rao and Sharan of their responsibilities.

Show cause notices were also issued to the two EDs for their termination, it is learnt. Their replies to the notices were discussed at the PNB board meeting of Thursday, sources said.

Allahabad Bank

Allahabad Bank board met in Kolkata on Friday to discuss, among other things, the future of Usha Ananthasubramanian, who was divested of her role as Managing Director and CEO in the wake of the Nirav Modi scam. The Nationalised Banks (Management and Miscellaneous Provision) Scheme 1970 provides that the Centre can remove a whole-time director, including the Managing Director, only after satisfying two conditions.

One, consultation with the board and, second, giving the whole-time director, including the Managing Director, an opportunity an to show cause against the proposed action, sources added. It is on the basis of this scheme, which requires consultation with the board, that the DFS has sought the opinion of the board, sources added.

Although the two PNB EDs have been divested of their responsibilities, they continue to attend office and none of their benefits have been taken away by the bank, a PNB official said.

Published on July 27, 2018
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