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Nirav Modi fraud costs PNB Rs 14,357 cr

Press Trust of India  |  Mumbai 

said today that its total liability works out to Rs 14,356.84 crore on account of the fraud allegedly carried out by and associates.

The fraud was detected at PNB's Brady House branch in involving certain accounts under 'gems and jewellery' sector wherein, through apparent connivance between "these entities and few employees of the bank", some LoUs/FLCs were issued fraudulently to certain overseas branches of Indian banks through misuse of the SWIFT messaging system.

The fraud allegedly perpetuated through Letters of Undertaking (LoUs)/Foreign Letter of Credit (FLCs) is currently being investigated by different agencies.

The CBI yesterday filed its first chargesheet in the matter detailing the roles of Nirav Modi, his brother and Subhash Parab, an in company.

"The liabilities on account of LoUs/FLCs, which became due up to March 31, 2018 amounting to Rs 6,586.11 crore have been paid by the ..," the PNB said in a regulatory filing, while announcing its fourth quarter result.

It further said that as a prudent measure, the has created liability in the books in respect of LoUs/FLCs which are becoming due after March 31 amounting to Rs 6,959.79 crore.

"Bank will make payments to the on the due dates of LoUs/FLCs.

"After including outstanding amounts under other credit facilities to the above entities, the amount involved now works out to be Rs 14,356.84 crore," PNB said.

The Reserve Bank has permitted PNB to make provisions against the fraud amount.

The filing further said that the bank has made higher than required provisions amounting to Rs 7,178.42 crore.

The remaining provision of Rs 7,178.42 crore will be made during the first three quarters of the ensuing financial year.

The posted largest ever quarterly loss of Rs 13,416.91 crore for January-March period, mainly on account of high provisioning for bad loans.

It had reported standalone profit of Rs 261.90 crore in the fourth quarter of 2016-17.

The total income for the fourth quarter also declined to Rs 12,945.68 crore, from Rs 14,989.33 crore in the year-ago period.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 17:00 IST
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