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 thereunder.

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.