PNB to Shut Operations at Mumbai’s Scam-Hit Brady House Branch
The Brady House Branch, which witnessed the biggest banking fraud, will downsize operations massively.
India's second largest public sector lender Punjab National Bank (PNB) is shutting almost all its operations in the Mumbai branch which was at the centre of the Rs 11,400-crore scam, Reuters reported on Tuesday, 3 July.
The Brady House Branch, which witnessed the biggest banking fraud in India's history, will see its operations downsized massively as the PNB fights to restore its reputation.
The 123-year-old bank will also transfer all big client accounts out of the branch after an internal investigation revealed "exceptional growth" in the last few years. The growth is being attributed largely to the branch's "controversial dealings with firms owned by two related jewellers."
According to one of the four sources that Reuters was in touch with, the PNB was transferring some employees and big accounts – each involving annual transactions of more than 500 million rupees ($7.28 million) – to large corporate branches for “better monitoring”.
“The bank has already started moving accounts to neighboring branches,” a source told Reuters. “Only a small retail banking operation will remain at the branch for the time being.”
A PNB spokesperson, however, told Reuters that the movement of these accounts was part of a regular restructuring.
Reallocation of some of the accounts is part of the regular restructuring process at PNB to strengthen internal systems and processes and centralise certain critical functions.PNB Spokesperson to Reuters
The other three sources told Reuters that over 2-dozen employees at the downtown Mumbai branch have been informed that the bank will be downsized. The branch could ultimately close all its operations, a source claimed.
However, the spokesperson said PNB was not planning to close operations there.
The Punjab National Bank has, in its complaint, alleged that two of the employees at the branch had facilitated "letters of understanding" to diamantaire Nirav Modi and his uncle Mehul Choksi without any sanctioned credit limit.
Reuters, however, reported in June that an internal investigation carried out by the bank found massive lapses by at least 54 staff members, many outside the said branch.
The bank has lost more than half its market value over the last few months after the scam surfaced.
(With inputs from Reuters)
(The Quint is available on Telegram. For handpicked stories every day, subscribe to us on Telegram)
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.