The Anatomy Of The Rs 11,000 Crore PNB Fraud

Former RBI Deputy Governor R Gandhi and RK Bakshi, former director at Bank of Baroda talk to BloombergQuint about the modus operandi behind the Rs 11,000 crore fraud and why PNB finds itself in a corner.

[poojapal]

This is the way news should be discussed and presented..they are not shouting or exaggerating ..others channels should learn from them . thank u bloomberg!!

[onlyequities]

Explained in a very simple manner. Thanks BloombergQuint

[vidya]

we cannot watch Bloomberg news channel on Tata sky ...why it's so I really like this Bloomberg...very clear presentation

[sgp]

In new IT age how come systems are not integrated very difficult to believe

[munizreza]

Great..!!
Well explained than any other news...!!!

[AbdulKareem-K]

Bloomberg Journalism is without any corruption, influence or politics. So peaceful here to listen and understand.

[abhiramr_ep]

This was a brilliant piece of news work. First postulating the theory of steps and then confirming it from two people in the banking domain and seeking their advice without interrupting them and only asking relevant questions. This was very good. Other news groups could learn a thing or two from this.

[vivekagrawal]

best show which explained the nature of fraud without doing tu-tu main-main..Indian media should learn to report from Bllomberg Quint.

[pandyp]

Block chain Distributed Ledger Technology the only solution for banking transaction to be fraud proof.

[tirlokchandgupta]

Credit did not come in nostro account. Lou issuing branch autorise negotiating bank to debit threir nostro account with them and despatch shipping documents to them. It is not clear how those shipping documents went into the hands of benificiary of the lou. Are those documents were also not entered in the core banking system as FIBC OR are directly given to the benficiary or DIRECTLY debited to the cash credit account. Here it is also possible that PNB nostro account reconciliation with the mirror account, which is to be done manually (IN ABSENCE of SWIFT INTEGRATIOM WITH CBS) maitained in their system was pending even before 2011 which has faciliated the episode. ( Most of the fraudsters take advantage of this weekness of House Keeping) IT has ALSO to be seen whether statutory auditors obtained balance certificates of the nostro accounts from banks having nostro accounts of the issuing bank.

[sureshpolali]

Simple to the point explanation. There was no noise here. Thanks a lot

[anikyt]

Top people should take moral responsibility if huge damage is done due to systematic failure. The fact is that if you got to any bank for 1 lakh rupees loan, the file move to so many people and senior people aware of that loan. Now 11000 crore has been given to a person a top people not knew about it, is not believable at all. Our PM and Finance Minister, RBI Governor so far has not spoken about it. They should come out and accept their part of failure because ultimately this is the money of common people.

[ananthnarayangn]

The best content and presentation as far as the news of this fraud is concerned. Well done Bloomberg quint.

[wisetalker]

Customer care: Hi sir, do you
have 2 minutes to talk
about a loan?
Cuatomer: No, I dont need
any loans now
Customer care: I'm calling
you from Punjab National
Bank, sir.We need the loan.

[ahwanjoshi]

Great work guys,

Suggestion: I could hear background noise. It would be great if you could do something about the noise of other staffs in the studio.Reference 19.12 to 20.00

[anilnadella]

I really appreciate the breakdown and explanation. No bias just pure discussion. Just facts being presented and as a layperson (to banking systems), lot of knowledge to be gained.

[ramac]

normally officer at PNB wound not have authority to issue LOU for bigger amounts. Even if he issues LOU for bigger amount
then accepting banks have to get the confirmation from higher authority depending on amount. before accepting.
If an employee of a bank wants sell bank to you would you buy. naturally you will enquire whether has authority if does not and who has got authority. I believe all the five employees are involved. they should be arrested immediately not suspended

[DipankarBhattacherjee]

Based on the explanation, I find it very hard to believe that this is an isolated incident which happened with one company and one bank only, particularly when the method had been tried and tested over 6 years.
PNB was one of the first to get into CORE banking and has a strong IT system.

[shrikramalei]

They did it,   without the bank knowing? HAHAHa !  This kind of cover up is to avoid a cascading effect on all the Indian banking sector, AVOIDING TO investigate ALL THE INDIAN BANKs, because they do all the same !

[neverloosehope]

1)All this calm talking is nice, but doesn't touch the root cause.
2)PNB Fort branch Bradyhouse has not taken security in form of raw diamonds or goldbar biscuits.
3)Bradyhouse branch should take the security in excess of 125 % of the sum to lent, ask Nirav & Mehul to wait 30 days, at least 10 days before payment is done.
4)Sell those diamonds & gold to the market and then payout with a delay of at least 10 days the amount after discounting a hefty profit of 20%-25 % just like a pawn house in USA.
5)Don't give bank guarantee unless a higher cash amount of the cutomer is frozen or in custody of the bank. Substantially higher.
6)No Nostro account non-sense. That's only worthless paper.
7)Where did this bankers study their profession? Until this kind of paper securities are accepted, there will be FRAUD ! Stop it ! Quickly!