PNB scam: Govt directs PSBs to consolidate their overseas operations

The government has directed public sector banks (PSBs) to consolidate their overseas operations against the backdrop of the Rs 127 billion letters of undertaking (LoUs) fraud in Punjab National Bank. The development means many branches and offices of PSBs in foreign countries will either be shut down or merged with others. 

Foreign branches of Indian banks had advanced money to companies belonging to diamond traders Nirav Modi and Mehul Choksi, the prime accused in the scam, allegedly based on fraudulent LoUs from PNB. 

“All 216 PSB overseas operations to be examined. Non-viable operations in the overseas market to be closed