Tuesday, 27 February 2018

Rs 114-bn PNB fraud gets bigger: Bank says total dues can be Rs 13 bn more

Punjab National Bank detected the fraud wherein Nirav Modi and associates allegedly acquired fraudulent letters of undertaking

Business Standard : The fraud-hit Punjab National Bank (PNB) on Monday reported an additional Rs 13 billion (Rs 1,300 crore) unauthorised transactions, taking the estimated quantum to Rs 126 billion (Rs 12,600 crore) in the scam related to diamond trader Nirav Modi and his uncle Mehul Choksi who is the owner of Gitanjali Gems.
In a 11.22 pm late night filing with the stock exchanges on Monday, the bank said, "In continuation to our filing with stock exchanges on February 14, 2018, we have to inform that quantum of reported unauthorised transactions can increase by $204.25 million."
At the current exchange rate, the amount comes to around Rs 13.23 billion (Rs 1,323 crore).The latest announcement from the public sector lender assumes significance against the backdrop of the probe going on into the Rs 114 billion (Rs 11,400 crore) scam, which is already one of the biggest in the Indian banking sector.
On February 14, the bank had detected the fraud wherein billionaire jeweller Nirav Modi and associates had allegedly acquired fraudulent letters of undertaking (LoUs) from one of the branches of the PNB for overseas credit from other Indian lenders.
The Central Bureau of Investigation on Monday said it questioned PNB Executive Director K V Brahmaji Rao, two General Managers and a retired official in connection with its probe into the multi-crore fraud.
The Income Tax Department also said it had attached 66 more bank accounts related to the accused Mehul Choksi.
The scam was perpetrated by way of fraudulent Letters of Undertaking (LoUs) generated in the name of Punjab National Bank.the amount of fraudulent transactions could be Rs 13 billion (Rs 1,300 crore) more than the current estimate of about Rs 114 billion (Rs 11,400 crore).

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