The Central Bureau of Investigation and Reserve Bank of India will investigate charges against Usha Ananthasubramanian who was sacked as the CEO and MD of Allahabad Bank on Monday. Allahabad Bank has reportedly taken the decision after Ananthasubramanian was linked to diamantaire Nirav Modi.
Ananthasubramanian had served as the CEO of Punjab National Bank from August 2015 to May 2017 and moved to Allahabad Bank in May 2017.
PNB, India's second-largest state-run bank, had earlier said that two jewellery groups headed by Nirav Modi and his uncle Mehul Choksi had defrauded it of about $2.2 billion. It was done by raising credit from overseas branches of other Indian banks using illegal guarantees issued by rogue PNB staff at a Mumbai branch over several years.
The PNB staff allegedly did not make note of the fake guarantees sent via the SWIFT financial messaging system in the bank's core accounting software, leading to the fraud remaining undetected for years.
In 2016, after separate incidents of misuse of the SWIFT system elsewhere, the RBI had repeatedly cautioned all banks, including PNB, and had sought details from the banks on their compliance with required cybersecurity controls.
It is alleged that Ananthasubramanian and two of the bank's executive directors - KV Brahmaji Rao and Sanjiv Sharan - and a general manager did not take "any meaningful corrective measures" on the RBI notices, said a CBI chargesheet filed in the City Civil and Session Court, Mumbai.
Ananthasubramanian, Rao and Sharan are among 22 people and three firms that have been charged by police in India's biggest bank fraud case.
Ananthasubramanian began her banking career at Bank of Baroda in 1982 as a specialist officer in the planning stream. She later joined Bharatiya Mahila Bank where she became the bank's first woman chairman and managing director.