The Centre said the two executives failed in their capacity in the top management to justify their dismissal. Terminating service is the highest form of action against a public servant.
The ministry said SWIFT, an international messaging system used by banks to sanction loans, was also misused.
Rao, who was set to superannuate on Monday, has put a petition in the Delhi High Court challenging the Central Bureau of Investigation’s (CBI’s) case against him. The finance ministry said his termination will be subject to the court order. Sharan was due to retire in May.
The action against Sharan and Rao comes six months after the government had issued a show-cause notice to both of them, asking why action should not be taken against them. The board of PNB was also consulted in the matter.
While PNB’s former managing director and chief executive officer Usha Ananthasubramanian was sacked on the last day of her work as the chief executive of Allahabad Bank in August, Rao’s and Sharan’s powers were divested by the Centre in May last year.
According to the CBI’s charge sheet, submitted in the Mumbai special court of the CBI in May this year, PNB’s top officials, including Ananthasubramanian, Rao, and Sharan, did not implement the circular and action notices issued by the Reserve Bank of India in 2016 on safeguarding SWIFT operations.
The group of companies belonging to Modi and Choksi had managed to secure loans illegally since 2011, bypassing the due procedures with the help of bank executives. The fraud came to light in January last year when the bank detected the fraud and reported it to the CBI.