Kozhikode: The Kozhikode District Crime Branch on Wednesday arrested senior manager of Punjab National Bank (PNB) Rijil M P, who is facing charges of siphoning Rs 12.68 crore from the bank's Link Road Branch in the city.
Rijil's arrest comes six days after the Kozhikode Principal Sessions Court rejected his anticipatory bail application.
Kozhikode police were facing flak for not questioning him in the case despite the City Town Police Station registering an FIR against him on August 29.
Kozhikode District Crime Branch assistant commissioner Antony T A, who is heading the investigation, said the police picked Rijil up from his relative's house at Chathamangalam panchayat, around 2 km from his house.
"We will be recording his arrest after questioning him," said the officer.
Rijil, who was the senior manager at PNB's Link Road Branch, is accused of transferring Rs 12.62 crore from nine different accounts to his father's bank account in the same branch and then electronically moving the money out to his trading account in Axis Bank.
Antony said he had traced the movement of the money and found that he had lost the money in day trading. Now the Axis Bank account has only around Rs 5 lakh and Rijil's father's account has around Rs 1,000.
After the Crime Branch took Rijil into custody on Wednesday, he reportedly told police that he first lost the home loan in day trading. Later, he routed other people's money from the bank into speculation trading to recoup the lost money, said Antony. "We will have to check the veracity of his claims," the officer said.
Rijil's Rs 12.68-crore alleged loot from PNB came to light sometime in mid-November when Kozhikode municipal corporation tapped one of its accounts to pay salaries to its employees. The corporation has 15 accounts with PNB's Link Road Branch.
When the corporation took the statement of the account in which it receives professional tax, it found that Rs 98.60 lakh was missing from the account, mayor Beena Philip had told Onmanorama.
When the corporation contacted the bank, the new manager was clueless about the missing money. Six months ago, Rijil was transferred to PNB's Eranhipalam branch.
But when the new manager contacted Rijil, he immediately transferred the missing amount to the corporation's account from another account of the corporation.
This raised the suspicion of the new manager, said police. The new manager then checked the movement of the money and found Rs 12.68 crore was siphoned off over one year and a half.
PNB immediately suspended Rijil from service, pending inquiry.
Based on a complaint filed by the Kozhikode Municipal Corporation, police have charged Rijil with cheating and criminal breach of trust by a banker (Sections 420 and 409 of the IPC).
If convicted, he could face imprisonment for the rest of his life.
Major lapses on PNB's part
Punjab National Bank's Link Road manager had refused to comment because he is not authorised to speak to the media.
But two other PNB managers who are not related to the case said there were major lapses and oversight on the part of the bank's higher officials.
The bank's core banking system (CBS) does not allow the same person to generate a transaction and approve it. The person who initiates the transaction is called the maker and the person who verifies it is called the checker. "There is a biometric firewall for both maker and checker to enter the core," said one of the two managers.
So Rijil cannot be the initiator and the approver of the transactions he is accused of performing, the official said. "There has to be a second person," he said.
According to the Crime Branch, Rijil allegedly performed at least 250 illegal transactions in one year and a half. He allegedly moved Rs 1 lakh to Rs 5 lakh almost every day. Sometimes, he moved Rs 5 lakh three times on the same day, said Antony.
Suspicious and high-value transactions would show up in the bank's daily monitoring report, said the two PNB managers. "Monitoring reports are auto-generated every day and exceptional transactions would figure in that report," said the manager. But the problem is that the reports are filed in the branch.
The core banking solution also auto-generates suspicious transaction reports or STR, if big-ticket money is involved.
Bank managers are under the hawk-eye of PNB's inspection and audit department. "The officials of the department visit branches once every six months. That's when they go through the daily monitoring reports filed in the branch. I'm surprised they did not find out about the theft," said the manager.