PNB’S BANKING CONTROL CRISIS: OUTSIDERS IN CASH CABINS, MASS SUSPENSIONS AND QUESTIONS THAT BANK MANAGEMENT CANNOT ESCAPE

A bank is supposed to be a fortress of financial trust. Its branches are expected to operate under strict supervision, its cash counters are supposed to be protected by layers of internal controls, its customer information is supposed to remain confidential, and its banking systems are supposed to be accessible only to authorised personnel.

Yet, if the reports emerging from Punjab National Bank (PNB) are accurate, some of these basic safeguards may have been compromised in a manner that raises deeply uncomfortable questions about the bank’s management, operational discipline and institutional accountability.

The controversy began following surprise inspections reportedly conducted by senior PNB officials and internal auditors on October 27, 2026. The inspections allegedly discovered private individuals inside bank branches, including sensitive operational areas, assisting employees with banking-related work.

The most alarming detail concerns an outsider reportedly found assisting a cashier inside a cash cabin at approximately 11:27 AM. A subsequent examination of CCTV footage allegedly revealed that the same individual had also assisted with the daily cash-closing process between 4 PM and 5 PM.

This is not a trivial administrative lapse. A cash cabin is not a customer waiting area, a public reception desk or a convenient workspace for whoever happens to be available. Cash handling, reconciliation, transaction authorisation and closing procedures are among the most sensitive functions inside a banking branch.

If an unauthorised individual was indeed participating in such activities, the obvious question is not merely why the branch manager allowed it. The far more consequential question is how an institution entrusted with crores of rupees belonging to millions of customers allowed its internal operating environment to reach that point.

And that question cannot be answered through suspension orders alone.

1. THE CASH CABIN INCIDENT: WHEN THE MOST BASIC BANKING SAFEGUARD APPEARS TO HAVE FAILED

According to the report published by Moneylife on October 30, 2026, PNB reportedly suspended around 20 branch heads following surprise inspections that allegedly found unauthorised outsiders inside bank branches, including cash sections.

The underlying report by Hello Banker described an inspection in which an outsider was allegedly found assisting a cashier in the cashier’s cabin at 11:27 AM on October 27. CCTV footage was subsequently examined, and another instance was reportedly identified in which the outsider assisted with the daily cash-closing process between 4 PM and 5 PM.

The concerned branch head was reportedly asked to submit an explanation as to why disciplinary action should not be initiated for negligence and violation of prescribed procedures.

The list of individuals allegedly found assisting at different branches included generator operators, recovery agents, insurance company representatives, business correspondents and other private individuals.

The precise identity of the individual involved in the specific cash-cabin incident has not been independently established through the publicly available material. Nor has PNB publicly disclosed a complete branch-wise list of the incidents.

Nevertheless, the reported circumstances deserve serious scrutiny.

A cashier’s cabin is not an ordinary workplace. It is part of the bank’s financial control environment. The separation of duties between cash handling, authorisation, verification and reconciliation exists for a reason: no individual should be able to exercise excessive control over a financial process without appropriate supervision.

Allowing an unauthorised outsider to participate in cash-related work potentially compromises the integrity of that arrangement.

Questions immediately arise:

Who permitted the individual to enter the cash cabin?

Was the person formally engaged by PNB, contracted through a service provider, appointed as a Business Correspondent, or simply an unauthorised visitor?

Was the person trained in banking procedures?

Did the individual handle physical cash, vouchers, customer records or any banking equipment?

Was the person allowed to use a bank employee’s computer or login credentials?

Did the individual participate in reconciliation or merely perform a non-financial assisting task?

Was the branch manager acting independently, or was the arrangement known to other officials?

These are not academic questions. They determine whether the issue was a basic breach of premises security, an unauthorised delegation of banking work, an access-control failure or something considerably more serious.

A surprise inspection should be the beginning of an investigation, not the end of one.

2. FROM 20 TO MORE THAN 50: EVEN THE NUMBER OF SUSPENSIONS NEEDS CLARITY

The reported scale of the disciplinary action has itself become a matter of concern.

Moneylife initially reported approximately 20 suspended branch heads on October 30. Hello Banker subsequently reported a higher figure of around 50, while the All India Punjab National Bank Officers’ Association (AIPNBOA), in its October 31 communication as reported by Hello Banker, stated that more than 50 branch managers had been suspended.

These numbers should not be treated as independently confirmed totals. PNB has not, in the material publicly available for this report, supplied a verified consolidated list of affected officers, branches or disciplinary orders.

However, even the reported figure of more than 50 is substantial enough to demand a transparent explanation.

If more than 50 branch heads across different locations were found permitting outsiders to participate in banking operations, the matter cannot simply be dismissed as a collection of isolated individual mistakes.

A pattern involving multiple branches raises questions about:

• Whether branch-level staffing arrangements had deteriorated.
• Whether the bank’s operational instructions were being consistently communicated.
• Whether controlling and circle offices were monitoring branch-level conditions.
• Whether the use of third-party personnel had become an informal practice.
• Whether internal inspections had previously detected similar problems.
• Whether the bank’s internal control systems were functioning effectively.

The bank needs to disclose the actual number of suspensions, the nature of the alleged violations and the stage of disciplinary proceedings.

Suspension is a serious employment measure. It should not become a substitute for a reasoned investigation.

Equally, a bank cannot permit operational security to become negotiable merely because a branch is busy or understaffed.

3. THE DEFENCE OF STAFF SHORTAGES: A SERIOUS ALLEGATION THAT PNB MUST ANSWER

The affected branch managers have reportedly cited staff shortages, employee absences and heavy customer footfall as reasons for seeking assistance from private individuals.

One suspended manager reportedly stated that staff members were on leave, the branch was experiencing a heavy rush, and assistance had been sought from a Business Correspondent to provide customer service. The manager also questioned why the Circle Office had not arranged personnel on deputation.

The AIPNBOA has raised similar concerns.

According to the association, some branches are operating with only one or two officers and a clerk, without adequate subordinate staff or essential infrastructure. It has also alleged that employees are being moved into newly created business verticals, leaving existing branches struggling to manage their regular workload.

The association has identified additional operational pressures, including gold-loan activities, work relating to the Fasal Bima government portal, the creation of additional zones and circles, and frequent video-conferencing meetings organised by senior management.

It has further alleged that several officers, including reportedly high-performing branch officials, were suspended without sufficient verification of whether outsiders had actually been permitted to access the Core Banking Solution (CBS) or use employees’ passwords.

These are allegations made by an employees’ association and require independent verification. They should not automatically be accepted as established facts.

However, PNB cannot simply brush them aside.

If a branch has insufficient authorised staff, the bank must have a documented contingency arrangement. It cannot expect a branch manager to maintain customer service, comply with every operational instruction and simultaneously resolve a staffing deficit through informal arrangements.

The responsibility for human-resource planning does not begin and end at the branch manager’s desk.

If employees have repeatedly sought additional staff and those requests were ignored, the Circle Office and the relevant controlling authorities must explain their decisions.

If there was no shortage, PNB should produce the sanctioned strength, actual deployment, leave records and attendance position for the affected branches.

If there was a shortage, the management must explain why a compliant staffing arrangement was not provided.

Either way, an answer is necessary.

A large bank cannot operate on the principle that senior management controls staffing, branch managers absorb the consequences and disciplinary action flows only downwards.

4. PNB’S OWN ANNUAL REPORT RAISES IMPORTANT QUESTIONS ABOUT STAFFING

The bank’s Annual Report for FY 2025–26 provides useful context.

According to the report, PNB had a total employee strength of 1,03,184 as of March 31, 2026, compared with 1,02,746 as of March 31, 2025.

At first glance, that represents an increase in the bank’s overall reported workforce.

However, the cadre-wise figures reveal a different movement in subordinate staffing.

The subordinate staff category declined by 1,155 employees, approximately 5.3%, in one financial year.

This is a noteworthy development, particularly because the staff association is specifically raising concerns about shortages of subordinate personnel.

To be clear, these are national aggregate figures. They do not establish that any particular branch lacked staff, nor do they prove that PNB management caused the incidents reported on October 27.

But they do justify a legitimate question: has PNB adequately assessed the staffing requirements of individual branches while changing its workforce composition and expanding operational responsibilities?

The bank reported 10,324 domestic branches as of March 31, 2026. It also reported 33,314 Business Correspondents and more than 18.53 crore customers.

A bank of this scale cannot treat branch-level staffing and operational security as separate administrative matters.

A shortage of support personnel may appear to be a human-resources problem. But when employees begin relying on people whose authority, access and responsibilities are not clearly defined, it becomes a banking-risk problem.

The reduction in subordinate staff does not prove the union’s allegations, but PNB should publicly explain how it has assessed the manpower requirements of its branches.

5. A BANK REPORTING ₹16,904 CRORE IN NET PROFIT CANNOT TREAT INTERNAL CONTROLS AS AN OPTIONAL LUXURY

PNB’s financial performance also deserves attention.

For FY 2025–26, the bank reported:

• Total income of approximately ₹1,47,017 crore.
• Operating profit of ₹29,290 crore.
• Net profit of ₹16,904 crore.
• Business per employee of approximately ₹29.42 crore.
• Business per branch of approximately ₹275.63 crore.

The bank also reported a 12.2% reduction in establishment expenses during FY 2025–26.

These figures do not establish that the reduction in establishment expenses caused staffing shortages. Nor is a decline in establishment expenses, by itself, evidence of wrongdoing.

But they make it reasonable to demand an explanation of how the bank balances cost management, employee deployment, customer servicing and internal controls.

A public-sector bank handling deposits belonging to crores of citizens cannot measure its success only through profitability, credit growth and productivity metrics.

A bank’s most important asset is the trust of its depositors.

A customer depositing money in a savings account or fixed deposit does not expect the institution to explain years later that operational arrangements were inadequate, that staff were unavailable, or that someone outside the authorised banking structure was assisting employees.

Cost efficiencies are welcome. Compromising the control environment is not.

There is a fundamental difference between running a bank efficiently and running it so lean that sensitive operations become dependent on informal arrangements.

6. BUSINESS CORRESPONDENTS ARE NOT THE SAME AS UNAUTHORISED OUTSIDERS: PNB MUST NOT CONFUSE THE ISSUE

One aspect of this controversy requires particular legal and regulatory clarity.

A Business Correspondent is not inherently an unauthorised outsider.

The RBI recognises the Business Correspondent model as a legitimate mechanism for expanding access to banking services. PNB itself has acknowledged operating this model since 2012.

Its Annual Report records that, as of March 31, 2026, the bank had 33,314 BC agents or Bank Mitras providing services such as e-KYC, cash deposits, cash withdrawals, fund transfers, KYC updating, cheque collection and loan-request initiation.

The RBI’s Commercial Banks – Branch Authorisation Directions, 2025, lay down specific requirements for this model.

Among other things:

1. A bank must carry out due diligence before engaging a BC.
2. A BC outlet or sub-agent must be attached to and overseen by a designated, employee-manned base Banking Outlet.
3. Banking services must be delivered within the permitted scope of BC activities.
4. The relationship between the bank and the BC must be governed by a properly defined written agreement.
5. The bank remains responsible for the actions of its BCs and their retail outlets or sub-agents.
6. Customer information must be protected.

The permitted BC activities include certain small-value banking transactions and customer-facing services. They do not give every BC agent unrestricted authority to perform the internal duties of a bank cashier or branch employee.

The distinction is critical.

There is a substantial difference between an authorised BC providing a permitted service through the approved banking framework and an individual being allowed to enter a cashier’s cabin to undertake cash-closing or other internal banking functions.

Likewise, a generator operator, insurance representative or recovery agent does not automatically acquire authority to access banking systems, financial records or sensitive operational areas merely because that person has a business relationship with the bank.

PNB must therefore disclose what it actually found.

Was the individual a formally appointed BC? Was the person working within a written agreement? Was the activity permitted under the RBI framework? Was the individual operating at an approved BC outlet or inside the branch’s restricted operational area? Was there any access to employee credentials or confidential information?

Blanket descriptions of all non-staff individuals as outsiders would be inaccurate. Equally, invoking the existence of a BC arrangement cannot justify activities outside the permitted framework.

The bank needs to make that distinction clear.

7. RBI’S OUTSOURCING RULES: SENIOR MANAGEMENT CANNOT ESCAPE ACCOUNTABILITY BY POINTING AT THE BRANCH MANAGER

The Reserve Bank of India’s Commercial Banks – Managing Risks in Outsourcing Directions, 2025, make an important principle clear.

Outsourcing an activity does not diminish the obligations of a bank, its Board or its senior management. Ultimate responsibility for the outsourced activity remains with the bank.

The RBI directions also require appropriate board-approved outsourcing policies, risk assessment, oversight and review.

The bank remains responsible for service-provider conduct, including the protection of customer information made available to service providers. It must retain effective control over outsourced activities.

The implications for the current controversy are significant.

If private individuals were performing tasks that should have remained under the control of authorised bank personnel, the investigation must not stop at identifying the branch manager who was physically present.

It must examine the complete chain of supervision.

Who approved the engagement of the individuals concerned?

Who was responsible for verifying their identity and authority?

Were there any written contracts or service-level agreements?

Did the relevant Circle Office know that branches were using these individuals?

Were these practices reported during previous audits?

Were there complaints about inadequate staffing?

Was the bank’s outsourcing policy communicated and implemented at branch level?

Did the internal audit system detect the practice earlier?

Who was responsible for correcting the underlying operational weaknesses?

The RBI has not created a regulatory framework in which a bank may outsource its responsibility and then blame the person working at the counter.

Nor can senior management claim that every breach of internal controls is exclusively a branch-level failure.

The branch manager has an obligation to protect the branch. The Circle Office has an obligation to supervise it. Senior management has an obligation to maintain the systems through which the bank operates. The Board has an obligation to oversee material risks.

Accountability must travel in both directions.

8. THE GREATER NOIDA PNB CASE: A SEPARATE INVESTIGATION THAT MAKES THE CONTROL QUESTIONS EVEN MORE SERIOUS

There is another significant PNB development that cannot be ignored while assessing the bank’s operational-control environment.

This is a separate incident involving a PNB branch in Greater Noida, Uttar Pradesh. The available reporting does not establish that it is connected to the October 27 inspections or the reported suspension of branch heads across India.

Nevertheless, it raises serious questions about the security of customer accounts, CBS credentials, transaction monitoring and internal verification.

In October 2026, customers, including farmers who had received land-acquisition compensation connected with the Jewar Airport project, began alleging that money in their savings and fixed-deposit accounts had disappeared or been transferred without their authorisation.

Early media reports carried widely varying estimates.

Some reports referred to customer allegations exceeding ₹12 crore. Others reported claims approaching ₹35 crore.

The more important subsequent development was the registration of a CBI case based on a written complaint submitted by PNB.

According to the CBI-related reporting published by ThePrint on October 31, the bank’s complaint identified unauthorised debits of ₹10.24 crore from various customer accounts as of the date of the complaint. The bank reportedly stated that account-wise reconciliation was still underway and that the exact amount could change following further examination.

That distinction is important: ₹10.24 crore is the amount identified in the bank’s complaint to the CBI at that stage. It should not be presented as the final adjudicated loss. Nor should early customer estimates of ₹12 crore or ₹35 crore be confused with the amount formally identified in the complaint.

What does the CBI complaint allege?

The complaint reportedly names a PNB office assistant/sub-staff employee, Deepanshi, and several other individuals, including account holders, as accused. The allegations include criminal conspiracy, breach of trust, cheating, falsification of accounts and related offences.

The CBI has registered a case, and the matter is under investigation.

According to the FIR-related reporting, the bank’s preliminary examination allegedly revealed a pattern involving:

• Misuse of CBS user IDs belonging to different branch officials.
• Unauthorised debits from customer accounts.
• Missing transaction vouchers.
• Disabling of mobile transaction alerts in certain accounts.
• Alteration of fixed-deposit details.
• Premature closure of fixed deposits.
• Changes to repayment-account details.
• Addition of certain individuals as joint holders in fixed-deposit accounts.
• Routing of money through beneficiary accounts.

The complaint reportedly alleges that transactions occurred over a period of approximately three years.

One particularly important aspect concerns access credentials.

According to the reported CBI FIR, the office assistant was not authorised under the bank’s internal guidelines and delegation matrix to carry out the transactions independently. The manner in which the CBS IDs of different officials were accessed, whether credentials were shared or obtained without consent, and the role of other officials and beneficiaries were all stated to require further investigation.

This is precisely why banking credentials and system access cannot be treated casually.

A username and password are not administrative formalities. They are part of the bank’s security architecture and accountability framework.

If a person who is not authorised to execute a transaction can allegedly access multiple officials’ CBS credentials, the investigation must determine how that became possible, how long it continued and why the bank’s monitoring systems did not identify the activity earlier.

It must also establish whether transaction alerts, authorisation controls, system logs and reconciliation procedures operated as intended.

The fact that a bank account holder may not discover an unauthorised transaction until visiting the branch to update a passbook is a matter that deserves particularly close scrutiny.

PNB has reportedly stated that it would honour genuine customer claims and had settled three claims totalling ₹43 lakh at the stage described in the news report. The bank has also reportedly cooperated with investigating agencies.

That response is necessary, but the public is entitled to much more: a verified account of the affected customers, the final amount, the money trail, recovery efforts and the measures introduced to prevent recurrence.

Why the Greater Noida case must be examined separately

The Greater Noida investigation is not proof that the branch managers suspended after the October 27 inspections were involved in fraud.

It is equally not proof that outsiders found in other branches accessed customer accounts or banking credentials.

The cases must remain legally and factually separate.

However, the alleged use of officials’ credentials in the Greater Noida matter makes it even more important for PNB to investigate whether access-control procedures are consistently enforced throughout its branch network.

9. PNB’S PAST FRAUD HISTORY: THE LESSON OF THE 2018 BANKING SCANDAL

PNB has previously been at the centre of one of India’s most consequential banking fraud controversies: the Nirav Modi–Mehul Choksi-linked fraud involving fraudulent Letters of Undertaking.

It is important to state that PNB was the victim bank in that major case. The past fraud does not establish any connection to the present branch-inspection controversy or the Greater Noida investigation.

However, the episode remains part of the bank’s institutional history and demonstrates why internal controls, authorisation systems, transaction verification and oversight are not merely procedural checkboxes.

The Government of India had ordered an SFIO investigation into the affairs of 107 companies and seven LLPs connected with the Nirav Modi and Mehul Choksi business groups in connection with the PNB fraud.

The Enforcement Directorate’s Annual Report for 2025–26 records estimated proceeds of crime of approximately USD 1.015 billion, or ₹6,498.20 crore, in the Nirav Modi case. It also records attachment and confiscation of assets and restoration of properties to PNB pursuant to court orders.

That legacy makes it particularly difficult to understand why questions about access controls, credentials, operational supervision and customer protection should ever be treated lightly.

A major financial institution should learn from its institutional history. Its controls must evolve in response to earlier failures.

The relevant lesson is not that every new PNB controversy is another version of the 2018 fraud. It is that banking controls must be designed to detect misconduct before customers are harmed, not merely to react after irregularities become public.

10. THIS IS NOT THE FIRST TIME CUSTOMER CLAIMS HAVE RESULTED IN QUESTIONS ABOUT PNB EMPLOYEE CONDUCT

A further example appeared in a consumer dispute reported by The Indian Express in June 2026.

The Uttar Pradesh State Consumer Commission upheld the finding of liability against PNB in a dispute involving ₹6.6 lakh in disputed withdrawals from a Lucknow customer’s savings account.

The customer, Mohammad Laiq Quarasi, had alleged that money deposited in his account between 2010 and 2011 was withdrawn without authorisation, with the transactions allegedly facilitated by the then branch manager.

The Lucknow District Consumer Commission had directed PNB in April 2019 to refund ₹6.6 lakh with interest and litigation costs.

PNB challenged that decision.

The State Commission subsequently upheld the substantive finding of liability and directed the bank to pay ₹6.6 lakh within 45 days, with interest at 7% per annum and ₹5,000 in litigation costs. The interest would rise to 9% per annum if payment was not made within the stipulated period.

The commission relied on the Supreme Court’s ruling in Pradeep Kumar & Another v. Post Master General & Others, reiterating that an institution may be held responsible for wrongdoing committed by its employees in the course of their service.

This is an important legal principle.

Customers do not deposit money with an individual cashier, branch manager or office assistant. They deposit money with the bank.

The institution cannot simply distance itself from the conduct of employees operating within its own system.

That principle is relevant to PNB’s present challenges, even though the consumer dispute is a separate case and does not establish wrongdoing in the October 27 inspection incidents.

11. THE MOST UNCOMFORTABLE QUESTION: WHERE WAS THE INTERNAL CONTROL SYSTEM?

PNB has a vast branch network and a substantial internal compliance apparatus.

Its FY 2025–26 Annual Report states that the bank disposed of 499 out of 537 vigilance cases registered during the financial year, representing 92.92% of the cases.

The same report discusses preventive vigilance, supervisory oversight and improvements in the bank’s monitoring mechanisms. It also records that systemic improvements relating to identifying sensitive posts and disabling CBS user IDs of employees during leave or absence were implemented across all eight Regional Rural Banks sponsored by PNB.

The latter disclosure should not be misrepresented as proof that the same system was implemented in every PNB branch. It concerns the sponsored RRBs.

Nevertheless, PNB’s own disclosures demonstrate that the bank understands the importance of sensitive-post identification and employee credential controls.

The question, therefore, is whether comparable controls are sufficiently effective throughout PNB’s own operations and whether the bank’s internal audit system is identifying weaknesses before they become serious incidents.

If outsiders were regularly assisting employees in routine banking activities, how long did this arrangement continue?

If the practice was widespread, did internal audits fail to identify it?

If it was limited to a few branches, were those branches adequately staffed and supervised?

If employee credentials were shared or misused in the separate Greater Noida case, what systems were supposed to prevent that?

If customer alerts were disabled in that matter, why was the change not flagged through appropriate monitoring?

If transaction vouchers were missing, what happened to the record-preservation and reconciliation process?

These are the questions that matter.

A bank cannot claim that it has strong internal vigilance merely because hundreds of internal cases were administratively disposed of. Disposal statistics do not, by themselves, demonstrate the quality, effectiveness or preventive value of the control environment.

The ultimate test of a control system is whether it prevents unauthorised conduct, detects irregularities promptly and protects customer money.

12. THE DANGER OF MAKING BRANCH MANAGERS THE CONVENIENT SCAPEGOATS

There is no justification for allowing unauthorised persons to perform sensitive banking functions.

A branch manager has a duty to maintain operational discipline, protect customer data, ensure authorised access and prevent unauthorised participation in banking activities.

If an officer knowingly allowed an unapproved individual to handle cash, access internal systems or participate in sensitive reconciliations, that officer must face an appropriate investigation and, where established, disciplinary consequences.

But accountability cannot be selective.

If the bank’s own staffing policy creates shortages, if branch managers have repeatedly requested additional staff, if Circle Offices failed to arrange replacements, or if senior management tolerated informal working arrangements, those issues must be investigated too.

The AIPNBOA has alleged that officers were suspended without adequate verification of their actual role in allowing outsiders access to CBS operations. It has also claimed that some officers were working under serious staffing constraints.

The association’s account must be examined, not accepted unquestioningly.

But neither should PNB management’s position be accepted without scrutiny.

The bank should identify the precise misconduct alleged in each case. There is a difference between allowing a visitor to enter a public customer-service area, permitting an authorised BC to provide a prescribed service, allowing an unapproved person to operate a bank computer, sharing a password and permitting a private individual to participate in cash reconciliation.

Treating all these circumstances as identical would be poor investigation and poor disciplinary administration.

A suspension order is not a substitute for establishing the facts.

The institution should establish individual responsibility through documentary evidence, CCTV footage, attendance registers, access logs, service agreements, written instructions and testimony from the employees concerned.

If violations are established, action should follow. If allegations are unsupported or the suspension is no longer justified, the bank should review the matter without delay.

A culture of accountability must not become a culture of arbitrary punishment.

13. THE QUESTIONS PNB MUST ANSWER — AND THE DOCUMENTS THAT SHOULD BE EXAMINED

The present controversy warrants a structured investigation rather than a series of isolated administrative inquiries.

At a minimum, PNB should answer the following questions:

A. The inspection and disciplinary action

1. How many branch managers and other officers have actually been suspended?
2. Which branches, zones and circles are affected?
3. What were the precise findings of the October 27 surprise inspections?
4. What specific activities were outsiders performing?
5. Were any individuals found accessing CBS, handling customer records or using employee credentials?
6. Were the suspensions based on verified individual misconduct or on the mere presence of non-employees inside branch premises?
7. Have the concerned employees received detailed show-cause notices and an opportunity to respond?

B. Business Correspondents and other third parties

8. Which individuals were formally appointed BCs?
9. Were there written agreements and records of due diligence?
10. Were the individuals performing services permitted by the RBI framework?
11. Were recovery agents, insurance representatives, generator operators or other contractors permitted to enter restricted operational areas?
12. Did the bank maintain visitor registers and records of third-party access?
13. Did the Circle Office approve or know about these arrangements?

C. Staffing and management responsibility

14. What was the sanctioned staffing strength of the affected branches?
15. How many officers, clerks and subordinate staff were actually posted?
16. How many personnel were absent or on leave on the relevant dates?
17. Were deputation requests made by branch managers?
18. Were those requests rejected, ignored or left unanswered?
19. Did PNB’s human-resources department conduct a branch-wise manpower assessment?
20. What was the basis for redeploying employees into new verticals while branches allegedly lacked adequate support staff?

D. Cybersecurity and financial controls

21. Were any employee usernames or passwords shared with outsiders?
22. Were any devices used by unauthorised individuals to access bank systems?
23. Were CBS login records and transaction histories examined?
24. Were there unusual logins, repeated failed access attempts or transactions during periods when authorised employees were absent?
25. Was there any unauthorised access to customer information?
26. Were CCTV recordings preserved in their original form?
27. Were cash-closing procedures independently verified?
28. Were daily cash balances, vouchers and transaction records reconciled?

These questions are not excessive. They are the minimum that should be asked when the operational security of a bank of PNB’s size is under scrutiny.

14. WHAT SHOULD HAPPEN NOW: ACTION, NOT MORE INTERNAL COMMUNICATION

The response to this controversy must go substantially beyond issuing an advisory reminding employees not to share passwords or allow outsiders to access banking systems.

Advisories are necessary. But an advisory is not an investigation, an investigation is not a corrective action plan, and a corrective action plan is meaningless unless it is implemented and independently tested.

The following steps are urgently required.

1. Independent, time-bound investigation

PNB’s Board and Audit Committee should ensure an independent review of the affected branches, including the circumstances that resulted in unauthorised individuals allegedly participating in banking work.

The review should examine both branch-level and Circle Office responsibility.

2. Preservation and forensic examination of evidence

Original CCTV footage, employee attendance records, visitor registers, CBS access logs, password-reset records, system audit trails, cash registers, daily closing documents and relevant correspondence should be preserved.

Any suspected manipulation or destruction of evidence should be examined separately.

3. Branch-wise manpower audit

PNB should disclose, at least to the regulator and the relevant oversight authorities, the sanctioned and actual staffing position of the affected branches.

It should also examine pending deputation requests, employee leave records and complaints regarding shortages.

4. Verification of every third-party arrangement

The bank should prepare a comprehensive inventory of BCs, recovery agents, service contractors, insurance representatives and other third parties operating in or around its branches.

Their contracts, duties, identities, access rights and supervision arrangements should be examined.

5. A complete CBS access-control review

Every employee login and privileged access arrangement should be reviewed. No unauthorised individual should be able to operate a core banking system through another employee’s credentials.

The bank should examine whether leave-related access suspension, role-based permissions, maker-checker verification and exception alerts are working effectively.

6. Transparent disciplinary proceedings

Each suspended employee should receive a clearly stated allegation and a fair opportunity to respond.

Cases involving actual access to sensitive banking systems or financial operations should be distinguished from cases involving non-financial customer assistance.

Where the evidence does not justify continued suspension, the bank should review the order promptly.

Where serious misconduct is established, proportionate disciplinary action should follow.

7. Protection and reimbursement of customers

Any customer whose information or money has been affected must be informed appropriately.

PNB must provide a transparent mechanism for customers to report suspicious transactions, obtain statements and seek the return of money wrongly debited.

The bank should disclose the final amount identified in the Greater Noida investigation and the status of genuine claims.

8. RBI and Ministry of Finance oversight

The Reserve Bank of India should seek a detailed explanation of the bank’s access-control arrangements, third-party oversight and branch-level staffing safeguards where the facts warrant regulatory examination.

The Department of Financial Services should also seek a comprehensive report from PNB on the disciplinary action, control weaknesses, staffing issues and corrective measures.

9. Criminal investigation wherever evidence supports it

If an examination establishes unauthorised transactions, credential misuse, misappropriation, falsification or other criminal conduct, the matter must be referred to the competent investigating agencies without delay.

The Greater Noida case has already reached the CBI. Its investigation should establish the complete money trail, the roles of all accused and beneficiaries, the manner in which credentials were accessed, and whether any additional persons were involved.

10. Faster investigation and trial

Financial misconduct affecting depositors should not be allowed to disappear into years of procedural delay.

Investigating agencies must complete forensic examinations and financial tracing promptly. Prosecuting authorities should seek appropriate priority for cases involving serious allegations of banking fraud and diversion of public money.

Courts must be allowed to determine criminal liability through a fair and speedy process. The objective must be justice, not sensationalism or punishment by headlines.

15. PNB CANNOT DEMAND ABSOLUTE TRUST WHILE LEAVING BASIC QUESTIONS UNANSWERED

The issue confronting PNB is not whether its branch managers should follow banking rules. They must.

It is not whether unauthorised people should be permitted to handle cash or confidential banking operations. They should not.

It is not whether employees should face disciplinary action when serious violations are established. They should.

The real issue is whether PNB is prepared to examine its own institutional responsibilities with the same seriousness with which it is examining the conduct of branch-level employees.

If the reports are accurate, the bank has a problem that goes beyond the conduct of individual branch heads.

If branch managers were forced to rely on private individuals because of staff shortages, management must explain why proper arrangements were not made.

If employees were allowed to operate sensitive banking functions without appropriate controls, the institution must explain how those controls failed.

If outsiders were able to enter cash cabins, the bank must establish who authorised their presence and why supervisory systems did not intervene earlier.

If CBS credentials were allegedly misused in the separate Greater Noida case over an extended period, the bank must explain how such access could remain undetected and what additional safeguards have now been implemented.

There is an uncomfortable irony here.

A bank may spend enormous resources on digital banking, financial inclusion, technology upgrades, customer acquisition and expanding business volumes. It may report impressive profits and productivity figures. It may proudly advertise its branch network and millions of customers.

But none of that compensates for a failure to maintain basic controls around the people who can access its premises, systems and financial records.

The depositors are not interested in how many internal meetings were conducted, how many advisories were circulated or how many employees were suspended.

They want to know whether their money is safe.

They want to know whether their personal banking information is protected.

They want to know whether every transaction is supported by proper authority and a verifiable audit trail.

And, most importantly, they want to know who will be held accountable when those safeguards fail.

PNB cannot answer these questions merely by suspending a few dozen managers and issuing another circular.

A bank’s internal controls are only as strong as the management that designs, funds, supervises and enforces them.

If responsibility is confined to the branch manager’s chair while decisions about staffing, outsourcing, deployment, technology and supervision remain unquestioned, the bank will have punished individuals without necessarily fixing the problem.

That would be an extraordinarily convenient outcome for management, but an inadequate one for customers.

The public deserves a transparent inquiry, a verified account of the incidents, an explanation of the staffing situation, a complete review of third-party access and an assurance that the bank’s systems are capable of protecting customer money.

The RBI, the Department of Financial Services, the PNB Board and the competent investigating agencies must ensure that the matter does not end with an internal advisory and a few suspension orders.

Depositors deserve protection. Employees deserve fair proceedings. And a bank handling public money must be held to the highest standards of accountability — from the person operating the cash counter to the officials occupying the highest positions in its management hierarchy.

DISCLAIMER AND EDITORIAL CLARIFICATION

This report is based on publicly available media reports, PNB’s published Annual Report for FY 2025–26, applicable Reserve Bank of India directions, reported employee-association representations and reporting on the CBI investigation in the separate Greater Noida matter.

The allegations relating to unauthorised outsiders participating in banking operations, the circumstances of the reported suspensions, alleged misuse of banking credentials and the alleged diversion of customer funds must not be treated as established criminal findings unless and until proved through the appropriate legal process.

The reported suspensions are administrative or disciplinary measures and do not amount to convictions. Registration of an FIR or a CBI case does not establish the guilt of any accused person.

As of 31 October 2026, based on the publicly available material reviewed for this report, no court of law has convicted the individuals facing allegations in the October 2026 branch-inspection controversy or the separate Greater Noida CBI case in relation to the incidents discussed here. All persons accused or named in connection with those allegations are entitled to the presumption of innocence and a fair investigation and trial.

The claims made by the AIPNBOA concerning staffing shortages and disciplinary proceedings are attributed to the association and have not been independently established in their entirety. Likewise, the allegations made by the bank in the Greater Noida CBI complaint remain subject to investigation and adjudication.

The inclusion of historical PNB cases is for institutional and regulatory context only. It does not imply that those cases are connected to the October 27 inspections or that any individual involved in the present matters participated in earlier controversies.

This article does not declare any person guilty of an offence. It calls for transparent, independent, time-bound investigations, proportionate disciplinary action, protection of depositors and speedy judicial proceedings wherever criminal cases are established.