PNB fraud: Finance Ministry to meet bankers to resolve payment issue

The logo of Punjab National Bank is seen outside of a branch of the bank

The logo of Punjab National Bank is seen outside of a branch of the bank

The lender's response came after the diamond merchant claimed that the bank's "overzealous" decision to go public with the alleged fraud worth ~Rs11,000cr has hampered his companies' valuation and restricted his ability to repay dues.

"When we had submitted the proposal for holding the discussion, we had apprehensions whether it would be accepted or not".

Jeweller businessman Nirav Modi may have left India even before his massive scam of Punjab National Bank, but many of his assets are still available, and the Enforcement Directorate (ED) has stepped up its seizures of Modi-linked assets.

Modi is accused of cheating Punjab National Bank of Rs 11,380 crore.

"On 05th February 2018, we on the basis of preliminary investigation report, informed simultaneously to our Board as well as to BSE and NSE of initial fraud case of Rs. 280.70 Crore", it said. This apart, Vipul, in his capacity as president (finance) of Firestar International, had not only visited and met PNB officials at the now infamous Brady House branch, but also those in the zonal and head offices.

Investigative agencies are probing the PNB fraud in which bank officials are accused of colluding with group firms of Modi and Mehul Choksi to fraudulently issue letters of undertaking (LoUs), or guarantees, which were then used by the firms to borrow from overseas branches of other banks. PNB has also suspended another General Manager Anil Bansal who was circle head of the bank in 2015 and cancelled Gokulnath Shetty's transfer order because of which Shetty remained in the Brady House Branch for seven years and issued more than 100 LoUs to Nirav Modi and his companies. The two are now under the radar of the CBI of defrauding the government owned bank, PNB for Rs 11,400 crore.

Apart from this, Nirav Modi's 9 luxury cars and 7.80 crores worth mutual funds were also seized.

"If a few people, or connivance of a group of people, can take a bank this large down to its heels with the kind of capital market implications one has been seeing, then it poses very serious questions", he said.

Choksi is Modi's uncle and promoter of the Gitanjali Gems group and other jewellery brands.

The CBI had received the complaint from the PNB on January 28 and a case was registered in the case on January 31.

What also set the alarm bells ringing was why none of Nirav Modi's firms were a "sight holder" on the De Beers Global Sightholder Sales' list of authorized bulk purchasers of rough diamonds.

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