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SBI discloses Rs 13.6-bn exposure in LoU issued by PNB to Nirav Modi

SBI Chairman Ranjish Kumar said the bank has some exposure on Gitanjali Gems, owned by Mehul Choksi, uncle of Nirav Modi

Press Trust of India  |  Kochi 

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Countrys largest lender today said it has an exposure of USD 212 million (about Rs 1,360 crore) in respect to letter of undertaking issued by to Nirav Modi, but does not have any direct exposure to the absconding designer.

"We dont have any direct exposure on but we do have some exposure on Punjab National Bank", of India told reporters here today.

He said the has lent USD 212 million to Modi on the basis of LoU issued by PNB.

Kumar, however, said the has some exposure to Gitanjali Gems, owned by Mehul Choksi, uncle of

Our exposure to Gitanjali is small we and we are not worried, Kumar said.

When asked about the lender's exposure to the entire gems and sector, he said it is less than 1 per cent of the total domestic loan book.

My domestic loan book is Rs 16 trillion and gems and sector exposure is less than Rs 130 billion which is less than 1 per cent, he said.

He said the is very careful as far as gems and industry is concerned and has been taking steps to put lot of risk mitigation measures for accounts from the sector.

He said has an elaborate system of and and the robustness of that system is very well recognised.

One of the practise which we follow is job rotation. We dont keep a person for more than three years at one position. There are certain positions which are very sensitive and we monitor those positions very closely, Kumar said.

He said the Swift system and the core banking system in are integrated.

He said banking is a risky business and risks are of various natures such as credit risks, operational risks, market risks and foreign currency risks.

Operational risk is always an unknown risk. Credit risk a calculated risk ... you know during the appraisal about the probability of default, he said.

need to manage the risks by creating awareness about the risks, having standard operating procedures, strict compliance of these procedures and having a strong oversight.

Ultimately, we are human beings who do the transactions and run on the trust. But, if there is a breach of trust by any individual, you have to have a process for detections, he said.

Review of the risk assessment processes and plugging the gaps should be a continuous process need to do.

Talking about Axis selling exposure, he said, They might have sold to other but whether we have bought or any other has bought, ultimately the exposure is on the which has issued the letter of undertaking.

First Published: Fri, February 16 2018. 15:32 IST