Indian bank is cheated of $1.8 billion in complex fraud

Government did nothing despite Nirav alert in 2016: Congress

Nirmala Sitharaman blames UPA for PNB fraud case

Since more than one lender is involved, all banks have been asked by the Department of Financial Services under the Finance Ministry to submit a status report soon on the fraud.

It is learnt that Modi - whose operations are spread across Europe, the US, Middle East and Far East besides India - has written to PNB and other banks that he would return their outstandings.

The BTVI news channel cited unnamed sources saying that Axis Bank had discounted 40 billion rupees ($624.4 million) worth of fraudulent LoUs from PNB and that it had sold a majority of this to SBI. According to reports, on February 15, 10 of Modi's properties (at least) were raided, including his home in Mumbai's Worli, his jewellery boutique in the city's Kala Ghoda area, and showrooms in Delhi's Chanakyapuri and Defence Colony. Also, Nirav Modi's brother Nishal Modi, a Belgian citizen, left India on January 1.

In an exchange filing on Wednesday, PNB said it has detected some fraudulent and unauthorised transactions in one of its branches in Mumbai "for the benefit of a few select account holders with their apparent connivance..."

"Based on these transactions other banks appear to have advanced money to these customers overseas".

Banking industry experts says that although PNB sees these fraudulent transactions only as a contingent liability, RBI norms require banks to provide 100 per cent of the sum the day a fraud is detected and reported to law enforcement agencies.

Government did nothing despite Nirav alert in 2016: Congress

Shares in PNB, the fourth-biggest among all Indian banks by assets, closed nearly 10 percent down on Wednesday.

Addressing the jeweller as "Chhota Modi" in a press conference, Surjewala said that Nirav was part of a delegation travelling with the prime minister despite "the complaint against him".

Indian federal agents last week said they were investigating a billionaire jeweller, Nirav Modi, and others over accusations that they defrauded PNB of $44 million. Under the terms of the LoU, PNB was the guarantor of these loans. His answer was in response to a question whether any foreign bank branch was also affected. An LoU is a letter issued by the bank to branches of other banks.

Stung by a massive Rs11,400 crore fraud, state-run Punjab National Bank (PNB) has lost over Rs8,000 crore of market valuation in two days-an amount equivalent to over six-times its full-year profit. Union Bank of India, Allahabad Bank and Andhra Bank also closed 2-5% within their 52-week low.

The PSU Banking Index fell 1.1% mainly due to PNB, Bank of Baroda, IDBI and Syndicate Bank.

On further investigation, it discovered that two of its former employees (named in the letter) had "fraudulently issued the LoUs to Modi's parternship firms without following prescribed procedure". Clarifying about Nirav Modi's photo with PM Modi at Davos, Prasad said, " Nirav Modi didn't meet PM Modi at Davos. Solar Exports, Steller Diamonds and Diamond R Us for availing buyers' Credit from overseas branches of Indian Banks. His net worth as of October 2017, according to Forbes, was $1.8 billion.

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