Punjab National Bank detects fraud worth ₹11000 Cr in Mumbai branch

Posted February 16, 2018

The Enforcement Directorate (ED) raided the home, offices and showrooms of Nirav Modi, the globally acclaimed diamond jeweler, with regard to the alleged Punjab National Bank (PNB) scam, according to media reports on Thursday.

Diamond trader Nirav Modi, who is being liked to the alleged Rs 11,000 crore Punjab National Bank fraud, has written to the country's second largest state-run bank promising to repay the money and has sought six months to return the money.

The state-owned lender Punjab National Bank (PNB) shocked the nation when it revealed that jeweller Nirav Modi, with support from its bank officials, duped the bank/s single Mumbai branch worth of Rs.11,400 crore.

"Whole lot of assets will be recovered".

"LoUs were opened in favor of overseas branches of Indian banks for import of pearls for the period of one year, for which as per Reserve Bank of India the stipulated time period allowed is 90 days from the date of shipment".

When pointed out that several BJP leaders claimed that the scam was going on since 2011 when the United Progressive Alliance was in power, the Congress chief spokesperson said, "The complaint of PNB to CBI mentions that Letters of Understanding were between February 9 and 14, 2017".

The banking system is in for a prolonged legal battle as other banks will start suing PNB over non-payment of dues and refusal to honour commitments.

Reacting to this Surjewala said, "This is a classical BJP double speak of diverting attention and relying on half-baked truth and presenting as gospel truth instead of the lies that they are".

"We are trying to protect the interest of all the lenders", he said.

PNB managing director Sunil Mehta addressed a press conference today where he explained that his bank had detected these fraudulent transactions on 3 January this year and had intimated the Central Bureau of Investigation (CBI) about it on 29 after carrying out internal investigations.

"Nirav Modi and his accomplices attempted to bypass established banking channels by perpetrating this fraud", Minister of Law and Justice Ravi Shankar Prasad told reporters.

PNB has not named the other banks it said had advanced money to customers based on the fraudulent transactions.

"There is clear criminal connivance of the group companies of Nirav Modi and Gitanjali Gems with our branch official and also, apparently, with officials of overseas branches of Indian banks", the PNB said in a detailed note sent to 30 Indian nationalised banks, a private bank and a foreign bank. The bank at its full capacity will take every action to book wrongdoers.

The circular was issued to all airports, ports and exit points to stop them from escaping. We were the first to inform SEBI about this under the disclosure norms. "Who is responsible for biggest bank loot scam unleashed by chhota Modi?" asked Surjewala.

He further said the government was monitoring the case on day-to-day basis.

In the aftermath, the PNB shares have tumbled by 20 percent this week.