Fraudulent transactions worth more than $1.77 billion was detected at the Mumbai branch of India’s Punjab National Bank (PNB). This case will also affect more banks in ways unexpected and it will lead to questioning the lending procedures of Indian banks which are already deep in debt. The Managing director of Punjab National Bank, Mr. Sunil Mehta said that the first started in 2011 of Rs 11,360 crores and insisted on the fact which is concerning that this fraud s the case of a single Mumbai branch. According to him, the fraud was detected in the second last week of January and a case was filed with Central Bureau of Investigation. In the FIR, billionaire jeweler Nirav Modi was accused by the prime suspect, he said that he is ready to pay back the loans of five-thousand crores.
Finance Minister has sought a detailed report regarding this case from the Enforcement Directorate as soon as possible. Mr. Nirav Modi is a jewelry designer is believed to be in Switzerland but it can not be confirmed by MHA. Two PNB bank officials were also detected to be working with Nirav Modi, SWO Manoj Hanumant Kharat and retired deputy manager Gokulnath Shetty. Both officials were also named in the FIR report and investigation is going. More than ten other employees have also been investigated by enforcement directorate. The statement from State-run Punjab National Bank said that it had detected unauthorized transactions of more than $1.77 billion from its Mumbai Branch.
Punjab National Bank is India’s second largest state-run lender with its assets more than $120 billion. According to its regulatory filing, the fraud has been aimed to benefit a few selected individuals and account holders and the enforcement agencies have taken the investigation into their hands. Last week, the federal agents said that billionaire Nirav Modi and more than ten other employees of Punjab National Bank has come under the scanner of the enforcement directorate.
According to one official from CBI, that the cases were related where the PNB has been frauded of more than $44 million and $1.77 billion. Nirav Modi, however, has not commented on this case and was not available on Wednesday again for any comments. Punjab National Bank said that apparently, other banks have lent money to abroad base customers on fraudulent transactions. Meanwhile, the flagship of Nirav Modi, Firestar Diamond said that it was not involved in the case.
This revelation shook the Indian public finance sector which has already been going through one of its worst phases due to heavy loans. As expected, the shares of PNB were on a downward spiral since the news came out and it has affected the Nifty and broader markets too. The statement from State-run Punjab National Bank said that it had detected unauthorized transactions of more than $1.77 billion from its Mumbai Branch. PNB said in a statement. “Based on these types of transactions, other banks have also appeared to have advanced money to these customers based abroad. The further liability arising out of these transactions on the bank shall be decided based on the genuineness of underlying transactions and the law.”
