Need to plug loopholes, says ex-PNB chief

Mumbai, February 23

Admitting that failure of linkage of SWIFT to core banking system (CBS) could have led to Rs 11,400- crore fraud at Punjab National Bank, the former head of the scam-hit lender today said there was an urgent need for banks to revisit their surveillance system and plug the loopholes.

Usha Ananthasubramanian, who is now managing director and CEO of Allahabad Bank, said at her bank also SWFIT is not linked to CBS, and the process of linking both the systems is currently on.

The country’s second largest PSU bank has detected $1.77-billion scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoU) from its Brady House branch in Mumbai to secure overseas credit from other Indian lenders. The fraud allegedly started in 2011 at PNB.

“I want to tell you that there could be always (loopholes) because technology advances so fast that what is today could get obsolete tomorrow and you might not have upgraded. Now, it is time for all of us (banks) to very closely revisit (the surveillance system) and then take all steps that can create maximum security,” Ananthasubramanian told reporters here today.

Before moving to Allahabad Bank, she was head of PNB between August 2015 and May 2017. She was also the executive director of PNB from July 2011 to November 2013. — PTI