Nirav Modi Case: PNB Official Gives Details of Rs 11,000 Cr Scam

How did two bank employees manage to pull off the mammoth scam? PNB official answers the most asked question

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As a political storm brewed over India's biggest bank fraud, Punjab National Bank on Thursday said billionaire diamantaire Nirav Modi has made "vague" offers to repay some of the USD 1.77 billion he and companies linked to him obtained in loans abroad using fraudulently acquired guarantees of the state-owned lender.

The Punjab National Bank (PNB) said it will take all possible action against the wrongdoers in the Rs 11,400-crore Nirav Modi fraud case, which started in 2011.

The state-owned bank said it had detected USD 1.77 billion fraud, in which billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from one its branches for overseas credit from other Indian lenders.

PNB has suspended 10 officers over the scam, and referred the matter to the CBI for investigations. The Enforcement Directorate is continuing raids at various places associated with the well-known jewellery designer.

PNB CMD Sunil Mehta told reporters that the bank detected the fraud and has referred the matter to the law enforcement agencies.

"In the last 123 years, we have seen many ups and down. The bank in its full capacity will take every action to book wrongdoers.’

This fraud had started in 2011. Our own bank detected it first and told the law enforcement agencies about this. PNB is fully committed to its clean banking policy. That is why we are the first one to detect and report this to the various law enforcement agencies
Sunil Mehta, CMD, PNB

Mehta tried to assure stakeholders, saying that it was a standalone incident confined to a single branch in Mumbai. He also said all other branches of the bank have been scanned to check any fraudulent activity.

The PNB CMD further said the bank has informed all the lenders about the case.

He further said the government was monitoring the case on day-to-day basis. "The bank has the capability and capacity to come out of this situation." The top PNB official, however, refrained from providing details as the investigations were going on.

He asserted that action will be taken against all those involved, irrespective of their seniority.

Mehta further said the bank will honour all its bonafide commitments. "We want to convey to all our stakeholders that PNB is pursuing clean banking agenda as a responsible bank." PNB shares continued to bleed for the second day in a row, ending with a steep loss of 12 percent at Rs 128.35 apiece on BSE.

Video Editor: Vishal Kumar

(With inputs from PTI)

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