The government is learnt to have given its sanction to prosecute two executive directors (EDs) of Punjab National Bank (PNB) in connection with the $2.2-billion fraud at the state-run lender, involving jewellers Nirav Modi and Mehul Choksi. The two EDs \u2014 KV Brahmaji Rao and Sanjiv Sharan \u2014 were already divested of power in May, along with former PNB managing director and then Allahabad Bank managing director (MD)Usha Ananthasubramanian, by their respective boards on a government directive. The finance ministry has hardened its stance against corruption in the public-sector banking space and has decided to strip any banker of power if probe agencies find incriminating evidence against their complicity in any fraud, a senior official told FE. The unequivocal internal policy, contrary to the muddled stance adopted earlier, will now shape the ministry\u2019s course of action relating to various fraud cases. Former IDBI Bank chief Kishor Kharat \u2014 who is the MD and chief executive officer (CEO) of Indian Bank \u2014 and former Syndicate Bank MD and CEO Melwyn Rego \u2014 who was earlier the deputy MD of IDBI Bank \u2014 were booked by the Central Bureau of Investigation (CBI) in April over a controversial loan provided to companies of former Aircel promoter C Sivasankaran that has turned a non-performing asset. The CBI has been investigating the fraud case and is expected to file the charge sheet soon, which will effectively decide the fate of these top bankers. Prosecution will be sanctioned against Kharat and Rego if the CBI finds incriminating evidence against them. The government believes its tough stance against corruption is unlikely to impact lending, as the recent passage of the Prevention of Corruption (Amendment) Bill, 2013, has drastically reduced the scope of unfair investigation or arrest of public servants, including bankers, for genuine errors of judgement in policymaking and will thus enable them to take bold commercial decisions. \u201cThe policy is clear: Don\u2019t harass the honest but don\u2019t spare the dishonest,\u201d said the official. The finance ministry\u2019s tough stance comes at a time when from Modi and Choksi to Vikram Kothari, promoters of dozens of companies have been accused of defrauding banks, raising suspicions about possible collusion of some public-sector bankers in it. In June, the Bank of Maharashtra board resolved to remove arrested CEO and MD Ravindra P Marathe from all functional responsibilities. As for the PNB case, the move to divest top bankers of power came after the CBI had named them in a charge sheet on the biggest fraud in the country\u2019s banking history. Recently, the government gave approval to prosecute Ananthasubramanian and dismissed her from service on the day she was to retire. She has now been reportedly granted bail by a special CBI court. Rao had been an ED at PNB since January 2014, while Sharan had been in that position since September 2016. Before that, Sharan was a general manager at PNB. The bankers were charged under Section 409 of the Indian Penal Code (IPC) for criminal breach of trust and Section 420 of the IPC for cheating and Section 13(2) of the Prevention of Corruption Act for causing wrongful losses to the bank and criminal breach of trust to the public. The CBI\u2019s initial charge sheet was filed against 25 entities, including 22 individuals and three firms. PNB revealed in February that firms of Modi and Choksi had defrauded it by raising credit from overseas branches of other Indian banks using illegal guarantees issued by a few tainted PNB staff since 2011-12. The bank has already suspended over 20 officials.