While the blame game begins in the Rs 12,636 crore PNB fraud, so lax were auditing controls that the last audit done by the Reserve Bank of India was nine years ago on March 31, 2009. For a mid corporate bank, like PNB's Brady House branch, that deals with high networth individuals, the audit is supposed to be done annually.

While the Department of Financial Services and the Chief Vigilance Commission will be questioning the RBI for these lapses, the point remains there were several other lapses in the system.

For instance, for every SWIFT transaction, a new reference number is supposed to be generated. In this case, it was the same number that was in use for the past 7 years.

PNB officials said the SWIFT and the CBS system was not linked all these years because the bank was waiting for an upgraded version of banking software, Finacle! These are some of the shocking admissions that the Punjab National Bank top brass have submitted in a report to the Finance Ministry on what were the causes of the USD 2 billion scam.

India Today has accessed details of the report. The good news is that the fraud was committed by just one branch of the PNB even though access to SWIFT was available to at least 200 officers across the country.

Interestingly, Nirav Modi never put in a single application for any of the over 500 LoUs that the branch issued, the report has admitted. The PNB report also admits that foreign branches of Indian banks have actually become a drain on the parent public sector banks.

In a shocking disclosure, the officials have admitted that, whatever cannot be sanctioned in India is being got sanctioned through foreign branches by PSBs.#casansaar (Source - BusinessToday)