PNB case: CA body asks RBI for details of corporate borrowers of all PSBs

The ICAI wants banking regulator to provide list of all state-owned banks’ corporate borrowers with outstanding loan amount of over ₹20000000000 In the wake of the alleged irregularities in the state-owned Punjab National Bank (PNB), the CA regulator — Institute of Chartered Accountants of India (ICAI) — has written to the Reserve Bank of India (RBI) for a list of corporate borrowers of all Public Sector Banks having outstanding loan amount of ₹20000000000 and above. This, the ICAI said in a statement late Thursday, was to have such a list “examined by Financial Reporting Review Board (FRRB) of ICAI for any possible violation of applicable standards of accounting as well as auditing.” Acording to the CA regulator’s website, the FRRB reviews “the general purpose financial statements of certain enterprises and auditor’s report thereon relating to which serious accounting irregularities in the general purpose financial statements have been highlighted by the media reports.” The ICAI is a statutory body established under the Chartered Accountants Act, 1949 for regulating the CA profession in India and it works under the aegis of the Ministry of Corporate Affairs. The ICAI said it has already set up a high powered group to study the systemic issues in the PNB matter and suggest remedial measures and improvement in the banking system as well as any other incidental matter. The group is slated to hold its first meeting on February 23. While various investigating agencies have initiated their investigations in the matter, the Disciplinary Directorate of ICAI suo motu has also started its investigation as per the CA Act, 1949 and rules framed thereunder, the ICAI said. The Disciplinary Directorate has written on February 15 to the Security and Exchange Board of India (SEBI), the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) and PNB, asking for details/reports/findings in respect of the alleged fraud, including the copies of specific findings regarding involvement of any CA or CA firm. The CA regulator has also written Corporate Affairs Ministry requesting it “to prevail upon the SEBI, the CBI, the ED and PNB to share their findings with the ICAI to enable it to accelerate the action against any CA who have played any role in this fraud.” The Disciplinary Directorate has also issued show cause notices to all the Central Statutory Auditors of PNB. Similarly, Central Statutory Auditors who have carried out quarterly review of PNB as well as the auditor of Gitanjali Gems Limited — allegedly involved in the matter — have also been issued show cause notice, the ICAI said. The concerned Deputy General Manager of PNB, who was also allegedly involved in the scam, has been summoned by the ICAI in terms of powers as vested under the CA Act to appear before it, produce a copy of FIR and all related documents in the alleged fraud, and provide details of the modus operandi.