PNB case: RBI looks into enforcement

PNB case: RBI looks into enforcement

With multiple agencies probing the Rs 13,000-crore fraud at state-run Punjab National Bank, the Reserve Bank of India (RBI) says that it has conducted its scrutiny, and the matter is currently under examination for "enforcement action".

Replying to an RTI query, the central bank also said that it has been issuing necessary instructions to banks from time to time on a variety of issues of prudential supervisory concern, including the management of operational risks inherent in the functioning of banks.

Asked to provide details of action taken by the RBI after receiving input of suspected fraud at PNB and steps being taken to check such recurrences, the banking sector regulator said that a confidential circular on time-bound implementation and strengthening of SWIFT-related operational controls was issued to public and private banks on February 20.

SWIFT (Society for Worldwide Interbank Financial Telecommunications) is a global messaging network used by financial institutions across the world to securely exchange information and instructions among themselves with the use of preassigned codes.

"Further, the scrutiny is conducted in the matter, and is under examination for supervisory/enforcement action," the RBI said in response to the RTI application filed by a PTI correspondent.

The RBI, however, declined to share further details of the February 20 circular, saying that it was "exempt from disclosure under section 8 (1) (a) of the RTI Act, 2005, since its disclosure may prejudicially affect the economic interest of the State".

The PNB initially reported to the RBI on January 29 about an incidence of fraud of
Rs 280 crore at its Brady House branch in Mumbai. This information was subsequently updated and revised under the fraud reporting platform on multiple dates, the RBI said.

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