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ICAI Issued Show Cause Notice to PNB Auditors

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PNB Matter-Action taken by ICAI

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered

Accountants Act, 1949 for regulating the profession of Chartered Accountants in India and it works under

the aegis of the Ministry of Corporate Affairs.

The attention of Institute of Chartered Accountants of India (ICAI) has been drawn to various media reports

highlighting the irregularities that have taken place in Punjab National Bank (PNB).

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 Chartered Accountants Act, 1949

and rules framed there under.

Taking suo motu cognizance of media reports, the Disciplinary Directorate of ICAI as a proactive step has

written letters on 15th Feb 2018 to Security and Exchange Board of India (SEBI), Central Bureau of

Investigation (CBI), Enforcement Directorate (ED) and Punjab National Bank (PNB), urging upon them to

share details/reports/findings in respect of the said alleged fraud including the copies of the specific

findings in respect of the involvement of any Chartered Accountant/firm of Chartered Accountants.

ICAI has also written to its parent Ministry i.e. the Ministry of Corporate Affairs requesting to prevail upon

SEBI, CBI, ED and PNB to share their findings with ICAI to enable it to accelerate the action against any

Chartered Accountant who have played any role in this fraud.

The ICAI has also set up a High Power Group to study the systemic issues in the Punjab National Bank

matter and suggest remedial measures and improvement in the banking system; and any other matter

incidental thereto. The first meeting of the group is scheduled on 23rd Feb 2018.

The Disciplinary Directorate of ICAI has issued Show Cause Notices to all Central Statutory Auditors of

PNB. Similarly, Central Statutory Auditors who have done quarterly review of PNB have also been

issued Show Cause Notice. Auditor of Gitanjali Gems Ltd., has also been issued the Show Cause Notice

in the matter.

The Deputy General Manager, PNB has been summoned in terms of powers as vested in Section 21C of the

Chartered Accountants Act 1949 to appear and produce a copy of FIR, all related documents in the said

fraud, give details of the modus operandi used in the fraud.

Further, the ICAI has also written to Reserve Bank of India requesting them to provide the list of the

Corporate Borrowers of Public Sector Banks having outstanding loan amount of Rs. 2000 crores and above

so as to have the same examined by Financial Reporting Review Board of ICAI for any possible violation of

applicable standards of accounting as well as auditing.

ICAI reaffirms its commitment to be a proactive regulator of the auditing and accounting profession.

Source- ICAI


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