PNB Official Arrested for Rs 168 Cr Bank Guarantee Fraud | Popgen Tech

According to the sources, the CBI has filed an FIR against Punjab National Bank (PNB) suspended execution. The employee is alleged to have defrauded the state-run lender of Rs 168.59 crore through 34 fictitious bank guarantees.

According to the CBI FIR, bank employee Priya Ranjan Kumar used a similar method to issue 34 fake bank guarantees. No entries were made in PNB’s main banking system, Finacle. Almost four years later, the uncle-nephew duo Mehul Choksi and Nirav Modi allegedly used the Lou (letter of engagement). They used the scam to drain the PNB of around Rs 13,000 crore.

“According to the interim investigation report dated November 27, 2022, it appears that the fraud was carried out by the bank staff in collusion with some unknown persons through illegal and unauthorized use of the systems of the bank. Further, the aforesaid fake bank guarantee has no record in the bank’s Finacle system,” the FIR alleged.

When Canara Bank’s Kohima branch notified PNB’s Parliament office on November 18 to invoke a bank guarantee of Rs 5.70 crore allegedly given by the latter, the new scam has been exposed.

According to the CBI, the guarantee was signed by two PNB workers. This included former branch manager Priya Ranjan Kumar, who is currently on administrative leave. In addition, A Venkatesan resigned from the company when the scam was discovered.

The PNB claimed that the biggest scam took place in the year 2018

In the FIR, the agency also included the names of Elangbam Ranananda, MD Enterprises in Andhra Pradesh. Additionally, Heyee Global Enterprises in Noida, Uttar Pradesh.
Kumar is accused of not entering the information about the bank guarantee in PNB’s Finacle system. But instead he was communicating with Canara Bank through the Structured Financial Messaging System (SFMS).

According to PNB, the biggest banking scam of 2018 involved companies owned by Choksi and Modi that defrauded Rs 13,000 crore. They used Bank-issued Letters of Understanding that were not entered into the core banking system by complicit bank staff to avoid detection.

Now, according to the FIR, the bank has discovered 34 such entries in the bank’s SFMS system. The entries were found at the Sansad Marg Branch Offices, New Delhi, and the Arrah Chowk Branch Office, Arrah (Bihar). These were issued by Kumar using illegal message format MT 799. Confirmation of the issuance and extension of false bank guarantees through the system was used.

“There is no record of these 34 SFMS message entries in the bank’s financial system, and no such bank guarantees were ever issued by the bank in respect of these advices/confirmations fraudulently in an invalid format, through MT 799 (Free Format Message) instead of the prescribed MT 760,” alleged the complaint filed by PNB, now part of the FIR.

The CBI said in a statement, “It was alleged that the accused in conspiracy with others through illegal and unauthorized use of the bank’s system, issued 34 false bank guarantees, thereby causing loss to PNB for a total amount of Rs 168.59 crore (approx).”