No instruction to PNB to meet commitments under LoU: RBI

Mumbai :  The Reserve Bank of India (RBI) on Friday denied having sent any instruction to Punjab National Bank (PNB), which detected a $1.8 billion fraud, to meet its commitments under the Letter of Undertaking (LOU) to other banks.

“There have been reports in the media that in the wake of fraud involving a sum of $1.77 billion that has surfaced in PNB, the RBI has directed PNB to meet its commitments under the LOU to other banks. RBI denies having given any such instructions,” the RBI said in a statement.

“The fraud in PNB is a case of operational risk arising on account of delinquent behaviour by one or more employees of the bank and failure of internal controls.

“RBI has already undertaken a supervisory assessment of control systems in PNB and will take appropriate supervisory action,” added the apex bank.

IANS