Despite having an illustrious four-decades-long, and counting, career in the financial domain, Sunil Mehta is making headlines once again with some sections of the market asking questions about his code of conduct. This comes at a time when IndusInd Bank has denied reports that PwC has submitted a report containing key findings in a matter related to suspected accounting irregularities to its board. According to an estimate, accounting discrepancies to the tune of Rs 2,100 crore may have potentially impacted 2.35 per cent of the bank’s net worth.
Who is Sunil Mehta, really?
Mehta is a career banker currently serving as Chairman of Mumbai-based private sector lender IndusInd Bank.
He has held many important positions across the financial domain during his four-decades-long career, holding key positions across major financial institutions including SBI, Citibank, AIG and PNB.
He is Chairman and MD at SPM Capital Advisers, a financial advisory and consulting firm he founded in mid 2010s, and is also serving as the chief executive of the Indian Banks’ Association (IBA) since January 2020.
Mehta has made strides across the banking, financial services and insurance (BFSI) space. He is a Fellow Member of the Institute of Chartered Accountants of India, and an alumnus of the Wharton School of Management, University of Pennsylvania, USA.
His stint at PNB coincides with the worst fraud in the history of Indian banking
Yes, Mehta was at the helm of Punjab National Bank when the country hit a historic low with the unearthing of the PNB fraud, back in 2018. He served as non-executive chairman of PNB from March 2017 to February 2020, according to his LinkedIn profile.
Dubbed as the biggest fraud in the country’s banking history, the case sent shockwaves across Dalal Street, leaving investors in doubt about sound corporate governance across the domestic corporate world.
At the time, as non-executive chairman, Mehta described the PNB fraud a people failure and not a system failure. The scam caused monetary losses to a number of banks, and led to a host of reforms and risk-management mechanisms in the financial space.
PNB Scam | How did it happen?
Bankers used fake documents at a Mumbai branch of the PSU lender that enabled the issuance of loans to overseas branches of other Indian banks for Nirav Modi and his uncle Mehul Choksi without proper collateral in place, bypassing PNB’s core banking system. Two PNB employees issued these documents, known as Letters of Undertaking (LoC), misusing the SWIFT messaging system—a global messaging facility that enables financial institutions to communicate with one another.
The scam unfolded after PNB filed a fraud report and lodged a series of complaints with the Central Bureau of Investigation (CBI)—the country’s top crime fighting agency, starting January 2018. The Modi-Choksi duo was found to have fraudulently secured guarantees to the tune of Rs 11,400 crore to obtain loans from the overseas branches, for the purpose of importing pearls.
The mega corporate fraud exposed the poor auditing standards within India Inc given the fact that it took the banking system almost seven-odd years to detect the financial anomalies and irregularities involved. Several eminent market personalities had questioned Mehta’s conduct at the top helm of the PSU bank.
Prior to joining PNB, Mehta worked with Citibank for more than 18 years before moving on to AIG, where his last assignment was Country Head and CEO-India, till December 2012. He was on the board of all AIG group companies in India. After that, he joined State Bank of India as an independent director. His stint at SBI was almost three years long.
Mehta also served as non-executive chairman at YES Bank, from March 2020 to July 2022. The RBI intervened in March 2020 to rescue YES Bank from a potential collapse, implementing a reconstruction scheme led by the State Bank of India (SBI) and other lenders, which included a moratorium and a new board of directors.
In February 2023, Mehta resigned as non-executive and independent director of Adani Green Energy to comply with applicable regulations after the RBI approved his appointment as director at IndusInd Bank.
