This time it’s PNB.
I think by now there are innumerable pieces published which more or less say that money was taken out against LCs; and never made good.
Economic Times had an article that pinned the blame on just two rogue employees who swindled the bank.
I think anyone who believes that it took just two low level employees to pull off 11,600 crores is the real sucker!
Reading through the article, what I gathered is that protocols (SWIFT / limits etc) were misused to get credit into PNB’s a/c from other banks, and the protocol bypassed banking software. Thus it was undetected. That does not seem right. A bank reconciliation statement would have shown thrown up red flags. For eg what was the corresponding credit entries to the debit entries for amounts received from various banks. If it is just a payable to counterparties which account does it ultimately go to? The CBS would have put it in some suspense a/c or some such place that would have alerted anyone even with basic familiarity. Did no supervisor, internal audit team, external audit notice such a breach, either large at once, or small but over long periods of time providing many opportunities for detection?
Doesn’t add up unless we assume that compliance / internal controls was compromised badly through rank and file.
Would like to get comments and thoughts from fellow investors.