Officials at Punjab National Banks (PNB) Brady House branch in South Mumbai may have made close to Rs 823 crore after receiving kickbacks for issuing fraudulent LoUs (letters of undertaking) to Nirav Modis firms. A chartered accountant (CA) has shared damning details of how the PNB staffers were allegedly handed out 2 per cent hush money per annum for several years.

Also read: PNB fraud: CBI grills Nirav Modi's chief financial officer Vipul Ambani

As per the information shared by a CA with India Today, PNB officials were charging a commission of around 2 per cent on each LoU per year, which was never shown in the bank's account's books.

Giving a break up of how PNB officials were allegedly charging commissions, the source explained: For instance, if the LoU amount is Rs 500 crore, then 2 per cent for one year - which comes to Rs 10 crore - was being charged as commission. Hence, for Rs 11,400 crore, the total commission that PNB officials may have charged would be around Rs 228 crore per year.

HOW SWIFT CODES WERE USED

What makes the PNB fraud more scandalous is how SWIFT codes were used by unauthorised officials.

A SWIFT message cannot be sent without the authorization of at least three bank officials.

Its only when all three bank officials put in their codes, can a SWIFT message be sent.

Manoj Kharat, who worked as a single window operator allegedly obtained access to SWIFT password.

The lowest-ranking official allowed to use SWIFT at the PNB branch was Gokunath Shetty who had one of the passwords.

Apart from Shetty, there were two senior level officials who had these passwords for clearance.

It is highly unlikely that the DGM of PNB branch office may not have been aware about the alleged fraud.

In addition to high level clearance, SWIFT messages for the entire year are audited by four different auditors.

In terms of LoUs which were issued by PNB, the amount comes close to Rs 823 crore. For example, LoUs worth Rs 280 crore (in first complaint), Rs 4880 crore (in second complaint) and LoUs worth Rs 5000-Rs 6000 crore were given between 2011 and 2016-17.

Also read: PNB fraud: 200 shell firms, benami assets under ED, I-T dept scanner

What makes the PNB fraud more scandalous is the way SWIFT codes were allegedly used by unauthorised officials. A SWIFT message cannot be sent without the authorization of at least three bank officials. Its only when all three bank officials put in their codes, can a SWIFT message be sent.

Manoj Kharat, who worked as a single window operator (SWO) at PNB had allegedly obtained access to SWIFT password. On Saturday, Kharat was remanded to 14 days CBI custody.

The lowest-ranking official authorised to use SWIFT at PNBs Brady House branch was Gokunath Shetty who would have one of the passwords. Apart from Shetty, there were two senior level officials who had these passwords for clearance.

It is highly unlikely that the DGM of PNB branch office may not have been aware about the alleged fraud. In addition to high level clearance, SWIFT messages for the entire year are audited by four different auditors.

A bank has different audits - statutory audit, internal audit, audits during quarterly closing, RBI audit during inspections and a concurrent audit. A concurrent audit is recommended if lapses are found in any branch.

What is surprising is that for all these years fraudulent activities were going on at PNBs Brady House branch without any auditor catching a whiff of hundreds of crores of rupees in taxpayers money being swindled.

Watch: CBI summons Nirav Modi's chief financial officer Vipul Ambani, grills him for 8 hours