Mumbai: The Board of state-owned Allahabad Bank today divested its MD and CEO Usha Ananthasubramanian of all powers with immediate effect, following a directive from the finance ministry after she was named in the CBI's charge sheet in the PNB fraud case.
Monday, the finance ministry had asked the boards of Allahabad Bank and PNB to take action against Ananthasubramanian and two executive directors of PNB.
The PNB had Monday divested its two executive directors of all powers.
"...the Board of Directors of the Bank in its meeting held on date has decided that Smt Usha Ananthasubramanian, MD & CEO be divested of all functional responsibilities of the Bank with immediate effect...," Allahabad Bank said in a regulatory filing.
The PNB fraud, which spanned over several years, started in 2011.
Earlier on Monday the financial services secretary Rajiv Kumar had said there was a set process for the removal and dismissal of directors from the board of banks and that has been initiated.
The government holds a little over 62 per cent stake in PNB and close to 65 per cent in Allahabad Bank.
Earlier on Monday, the PNB board had convened an emergency meeting on the insistence from the government's nominee director.
In a filing to BSE stock exchange, PNB had said, "In view of the recent developments, the board of the bank in its meeting decided to divest the functional powers of executive directors, K V Brahmaiji Rao and Sanjiv Sharan and sought their replacement from the department of financial services."
The CBI filed its first chargesheet in the country's largest financial scam worth over $2 billion at PNB allegedly committed by billionaire jeweller Nirav Modi.
The chargesheet detailed the alleged role of PNB's former chief Ananthasubramanian in the scam. Ananthasubramanian was the MD and CEO of PNB from 2015 to 2017 and was questioned recently by the CBI in connection with the case.
Jeweller Nirav Modi had used fake letters of undertaking (LoUs) to defraud PNB of over Rs 13,000 crore in connivance with bank officials by exploiting the loophole of non-integration of SWIFT with the Core Banking Solution.