PNB files complaint with CBI alleging Rs 11,400 crore fraud
BY Team MP14 Feb 2018 11:43 PM IST
Team MP14 Feb 2018 11:43 PM IST
New Delhi: State-owned Punjab National Bank on Wednesday said it had detected a USD 1.77 billion (about Rs 11,400 crore) scam where billionaire-jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.
PNB has suspended ten officers and referred the matter to CBI for investigation.
Financial Services Secretary Rajiv Kumar said this seems to be an isolated case and is not going to impact other lenders. "The finance ministry has taken proactive steps by asking the lender to report the matter to CBI and Enforcement Directorate (ED) so that action can be taken quickly," he said.
While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.
An LOU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.
Foreign bank branches too are under investigation.
Three other jewellers, Gitanjali, Ginni and Nakshatra, are under the scanner with CBI and ED looking at their arrangements with various banks and end use of money, a senior official of a public sector bank said.
No immediate comments were available from these companies.
Last week, PNB had lodged an FIR with CBI stating that fraudulent LoUs worth Rs 280.7 crore were first issued on January 16. At the time, PNB had said it was digging into records to examine the magnitude of the fraud.
Among those suspended is a deputy manager, Gokulnath Shetty, who was posted at PNB's foreign exchange department in Mumbai since March 31, 2010.
PNB said in a statement that fraudulent transactions took place in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance.
The CBI has received two complaints from the PNB against billionaire diamantaire Nirav Modi and a jewellery company alleging fraudulent transactions.
Modi, whose jewellery creations are popular among global celebrities, may face a fresh CBI probe as the agency is looking at suitable legal action to be taken in the case.
The CBI is already investigating him for alleged cheating and fraud involving Rs 280 crore at a PNB branch.
Concerned over fraud of over Rs 11,300 crore at Punjab National Bank (PNB), the finance ministry has asked all banks to send reports involving this case or other such incidents latest by the end of this week.
Shares of Punjab National Bank on Wednesday took a hit slumping 8 percent. More reports on P12
Next Story