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Saturday, February 27, 2021

Nirav Modi case: PNB fraud rises to Rs 12,700 crore, more unauthorised transactions detected

The financial fraud, one of the biggest in the banking sector, was unearthed after an internal inquiry by the PNB. It was found was the two Mumbai-based diamond jewellers had been allegedly duping foreign banks with fake Letters of Undertakings from PNB for several years.

By: Express Web Desk | New Delhi |
Updated: February 27, 2018 5:38:25 pm
Mehul Choksi (L) & Nirav Modi (R) are now being pursued by investigating agency in a loan fraud worth Rs 12700 crore. (File)

The quantum of unauthorised transactions by diamond merchant Nirav Modi and his uncle Mehul Choksi has increased by Rs 1,300 crore, the Punjab National Bank (PNB) said in a stock exchange notification late on Monday night. The total amount of fraudulent transactions now stands at Rs 12,700 crore. The development was also confirmed by the CBI.

The financial fraud, one of the biggest in the banking sector, was unearthed after an internal inquiry by the PNB. It was found was the two Mumbai-based diamond jewellers had been allegedly duping foreign banks with fake Letters of Undertakings from PNB for several years.

The development comes at a time when the Enforcement Directorate is planning to move the Supreme Court to obtain non-bailable warrants against the diamantaires after they failed to appear before the agency despite the repeated summons.

Meanwhile, the CBI has written to at least five banks — Axis Bank, Allahabad Bank, State Bank of India, UCO Bank and Union Bank of India — asking them to share details from their international divisions on buyer’s credit availed by firms which are part of the Modi and Choksi groups.

READ | ED expands probe against Nirav Modi and Mehul Choksi

With PNB fraud coming to light, the CBI has registered cases against several companies in instances of wilful loan default in last one month; the most recent being the case against Simbhaoli Sugars Ltd for allegedly defaulting loans to the tune of Rs 97.85 crore. The bank named Deputy General Manager Gurpal Singh, who is the son-in-law of Punjab Chief Minister Captain Amarinder Singh, as one of the accused in the case.

Expressing concern over the increasing number of wilful defaulters in the banking sector, Finance Minister Arun Jaitley blamed the bank management and auditors, internal and external, of failing to do their jobs.

“Bank frauds which have now come to surface if you periodically have this kind of incidences, I think the entire effort of Ease Of Doing Business itself goes into the background and therefore these are scars on the economy which take the front seat,” Jaitley said.

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