The Centre on Monday announced that Allahabad Bank Managing Director and Chief Executive Officer Usha Ananthasubramanian was dismissed from service, PTI reported. The government also granted its approval to the Central Bureau of Investigation to prosecute the former Punjab National Bank managing director and chief executive officer after the investigating agency named her in its chargesheet on the Rs 13,000-crore fraud case.

Anathasubramanian was scheduled to retire on Friday, PTI reported.

In May, the Central Bureau of Investigation’s chargesheet had alleged she was aware of the illegal dealings with fugitive businessman Nirav Modi and that she misled the Reserve Bank of India. The Allahabad Bank had divested her of all her roles based on the agency’s claims.

The agency had sought a “sanction of prosecution” against her from the Centre in the case. The Parliament had recently passed to amendments to the Prevention of Corruption Act, which makes it compulsory for investigating agencies to seek the Centre’s permission to prosecute current or retired government officials.

The scam

The Punjab National Bank informed the Bombay Stock Exchange on February 14 that it had detected “fraudulent and unauthorised transactions” worth Rs 11,380 crore at its Brady House branch in South Mumbai. The bank revised this figure to Rs 12,703 crore and later to around Rs 13,645 crore.

A few officials of the public sector bank had allegedly issued fraudulent Letters of Undertaking – essentially letters of credit telling others banks that it would meet a customer’s liabilities – to Modi’s companies. Some bank officials have been arrested and are under investigation.

An unidentified official said the Centre had granted the CBI permission to prosecute another accused Sanjiv Sharan, former executive director of the Punjab National Bank, BloombergQuint reported.