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.
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