PNB : The day after
The sensational disclosure of the Rs 11,300-crore fraud at the Fountain Branch of Punjab National Bank (PNB) in Mumbai committed by billionaire jewellery designer Nirav Modi and some of his family members has rattled the government, besides sending shock waves across the banking and gems and jewellery industry in the country. The bank stumbled on the fraud early-January and informed the CBI and the ED about the case on January 29. The agencies registered an FIR on January 31. A fortnight after the FIR, the two investigating agencies have raided Nirav's and Gitanjali Gems' assets across the country and are said to have seized cash and jewellery worth over Rs 5,000 crore. Meanwhile, politics has begun playing out on the issue. Union Law Minister Ravi Shankar Prasad has said that the process to cancel the passports of Nirav Modi and Mehul Choksi, Nirav's maternal uncle and managing director of Gitanjali Gems, has been initiated. Congress President Rahul Gandhi has blamed the government for the fraud, more for the way all the four accused, Nirav, his wife Ami, brother Nishal and maternal uncle Mehul Choksi left the country in the first week of January this year, around the same time when the PNB stumbled upon the fraud. Gandhi also equated the running away of Nirav and his family members after committing the fraud with Vijay Mallya and Lalit Modi, suggesting that people in the Narendra Modi government may have informed all the three before the investigating agencies could lay their hands on the fugitives. The Congress also released a photograph of Prime Minister Narendra Modi posing for a picture with a delegation of Indian businessmen that included Nirav Modi at the World Economic Forum's annual meeting in Davos last month. Replying to this, Prasad said that Gandhi was present in a jewellery exhibition in 2013 organised by Gitanjali Gems at Delhi's Imperial Hotel. The BJP countered the Congress by saying that the fraud began in 2011 when the UPA was in power. It also clarified that Nirav was not a part of the official delegation of PM Modi. Meanwhile, the PNB management has said that the bank will come out of the current crisis clean and stronger. The bank also said that it is confident that the entire amount of the fraud will be recovered as the main accused in the case has promised to repay all his liabilities. In addition to the Rs 11,300 crore fraud, PNB has an exposure of Rs 1,700 crore to Nirav and Choksi's companies. As nearly half a dozen banks had offered credit facilities to Nirav and Choksi's businesses based on the PNB guarantees, PNB has said that it has enough funds to provision the debts taken by Nirav and Choksi's businesses from other Indian banks.