NEW DELHI: The Delhi High Court has stayed the trial court proceedings against PNB's 11 top officials, including the former and current executive officers as also the present managing director, facing allegations of criminal conspiracy and violation of banking regulations.
Justice R K Gauba sought response of the Reserve Bank of India (RBI), the complainant in the case, on PNB's plea challenging the trial court's summoning order.
"Be listed on July 17. Meanwhile, the proceedings before the trial court shall remain stayed," the high court said in its recent order.
The high court also said: "The counsel for the second respondent (complainant) on being asked was unable to give any explanation as to why a general reference has been made in the complaint leading to similar general mention in the summoning order to Section 46 of Banking Regulation Act, 1949, without the specific penal clause being indicated.
" The trial court in March had asked Punjab National Bank's Managing Director (MD) and CEO Sunil Mehta, Executive Director Sanjiv Sharan, former MD Usha Ananthasubramanian, former executive director R S Sangapure and seven others to appear before it on the basis of a complaint filed by the RBI.
It had also summoned as accused serving General Manager I J Arora, Assistant General Managers T R Venkateswaran and I P Singh, Chief Manager S K Srivastava, former general managers Nehal Ahad and Rakesh Kumar and former deputy general manager Sunil Mohan.
In its complaint, the RBI has alleged non-compliance of its 2016 order directing commercial banks, including the PNB, to integrate their core banking system with various critical applications to reduce online fraud.
The central bank has alleged that the accused willfully and deliberately gave false information in their compliance report and the PNB's core banking system was not integrated with the applications and there was no online integration of SWIFT with the RBI's Core Banking Solution (CBS).
SWIFT is a messaging system that enables banks and financial institutions to send and receive information about financial transactions through encrypted codes.
RBI further alleged that the accused willfully and deliberately made false statements in the compliance report despite being aware of the risks and repercussions of failing to integrate SWIFT with the CBS.
In a circular to all commercial banks, including the PNB, the RBI had advised banks to strengthen the controls around the operating environment for fund transfers through SWIFT or similar interfaces and banks were advised to minimise the practice of direct creation of payment messages in the SWIFT environment with routing the same through CBS.
The RBI has claimed that the case came to light during systems inspection at the PNB's Brady House Branch in Mumbai, where it was found that the information provided by the officials in the last few years were completely false.
"The accused have willfully made false statement in utter disregard to their statutory obligation of the Banking Regulation Act, 1949.
"Accused have deliberately furnished false and misleading statements to RBI and it was done with common intention and in connivance with each other," it has alleged.