No instruction to PNB to meet commitments under LoU: RBI

Mumbai Feb 16 (IANS) 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
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