The attention of Institute of Chartered Accountants of India (ICAI) has been drawn to various media reports highlighting the irregularity happened in Punjab National Bank (PNB) revealing that the Bank has detected a $1.77 billion (about Rs.11,400 crore) wrongdoing where a Jeweller Nirav Modi allegedly acquired fraudulent Letters of Undertaking (LOU) from a branch of PNB in Mumbai to secure overseas credit from other Indian lenders. These reports further reveal that CBI has since registered a case against Nirav Modi and others on the basis of the complaint filed by PNB. It has also come out that Enforcement Directorate (ED) is also conducting various raids and investigations in the matter.

In this regard, ICAI in consonance with its role as regulator considering the mammothness and modalities of the irregularity that has been perpetrated on the Public Sector Bank, has suo-moto triggered its disciplinary mechanism by writing to the Bank concerned and also all other investigating agencies i.e. SEBI, ED and CBI requesting them to provide requisite details of their investigations in PNB matter.

The ICAI has on its own also constituted a High Power Group in this matter to study the systemic issues in the PNB matter and suggest remedial measures and improvement in the banking system to ensure preventive measures to avoid such type of incidents.

It needs to be emphasised that ICAI would be actively pursuing the issue with the concerned agencies and stakeholders so as to examine the matter in detail to suggest improvements.

About ICAI

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 for regulating the profession of Chartered Accountants in India. ICAI is the second largest accounting body in the world with a strong tradition of service to the public interest and to the Indian economy. During its more than 68 years of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for maintaining highest standards in technical, ethical areas and for sustaining stringent examination and education standards.

Since 1949, the profession has grown leaps and bounds in terms of membership and student base. Starting with a handful of about 1700 members, today, the strength of Chartered Accountant fraternity has grown to more than 2.70 lakh members. On the education front, the ICAI began with mere 259 students and today about 8.00 lakh active students are a part of ICAI. The Institute functions under the Ministry of Corporate Affairs, Government of India. It has its headquarters in New Delhi and 5 Regional offices in Chennai, Kanpur, Kolkata, Mumbai and New Delhi. It presently has 163 branches spread all over the country. In addition, it has also set up 31 chapters outside India and an overseas office in Dubai.

Also Read-

No instructed PNB to meet its commitments under LOU: RBI

PNB clarifies on alleged Scam by Nirav Modi and Gitanjali group

The Punjab National Bank (PNB) Fraud

PNB issue Caution Notice in Suspected Fraud case

What is the Nirav Modi scandal?

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63 responses to “Steps initiated by ICAI on Punjab National Bank Matter”

  1. Khaja Abwar Nohiuddin says:

    The auditors should be allowed to work independently, by giving proper accommodation, system to each member of the audit team withe an employee of Bank allotted daily (employee to be changed daily to control leakage of audit observations) to assist the audit team. The concurrent audit team to be taken care as statutory audit team and monthly remuneration is paid at par with statutory audit payment This will enable the concurrent audit team to work with ease and comfortably. The system should have attendance recorded like log to know the presence of members

  2. CA Sanjay H Shah says:

    The Process with which the Audits are alloted to handful of members need to be changed. Merit based allotment of Bank Audits should be given. Fees structure should also undergo change and reporting should be more strict. A presentation by Concurrent Auditor as well should be mandatory. Complete overhauling of the CA’s conducting Audits be looked into.

  3. jitendra thacker says:

    I agree with you the joke is CA is doing compilation work based on the books and documents produced . As the audit part the ca may be knowing and reporting and might qualify the audit report but banks need to keep records in public and the RBI rules may not permit the disclosure and the benefit is been taken by the scammer. Now the ICAI issue the guideline is wondering ! ICAI should wake up as every scam is indication of failure of Audit and need to improve without the scam but only from the audit they need to improve. Now issuing the guide lines is very late and the banks has lost faith of public, daily new rumour or scams comes and that definitely spoiling the name of public sector bank.

  4. CA Sanjay agrawal says:

    for the audit work it must me essential the CA involved in only audit assignment. He should not be involved in Taxation work , project finance work etc.. If ICAI take this type of step quality of audit will improve.

  5. harinatha babu says:

    This type of scams occured in india due to changing of hands with their commitments and satisfaction. Because corporates or big deals handle the large trasnactions and fulfill the commitments to everybody.
    Nobody support to Farmers or agriculturists, because farmers are unable to fulfill or satisfy to bank people or top level management. due to elections some of the political parties announced for waiver of crop loans for getting their benefit. In india 95% of Crop Loans used for Agriculture. for Waiver of Crop loans, RBI Chairman, SBI Chairman and fenominal persons are refused the crop loans.

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