PNB's Rs 110-bn fraud case isn't out-of-control, says FinMin official

Punjab National Bank (PNB) disclosed that it has detected some fraudulent transactions with financial implication of USD 1.171 billion and the matter has been referred to law enforcement agencies

The finance ministry today sought to allay worries over the Rs 113 billion fraud case at Punjab National Bank, saying the case not "out-of-control" and it is taking action in this respect.

"I dont think this is out of control or too big a worry at this point. That is my broad sense," Joint Secretary in Department of Financial Services Lok Rajan said on the sidelines of an event here.

Earlier in the morning Punjab National Bank (PNB) disclosed that it has detected some fraudulent transactions with financial implication of USD 1.171 billion (about Rs 11,334.4 crore) and the matter has been referred to law enforcement agencies for the recovery.

Based on these transactions, other banks appear to have advanced money to these customers abroad, it said.

Punjab National Bank on Wednesday also suspended 10 officials in connection with jewellery designer Nirav Modi fraud case. 

In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions. The quantum of such transactions is USD 1771.69 million (approx), it said.

The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land. The bank is committed to clean and transparent banking, PNB said.

This is the second incidence in less than 10 days where a bank has been defrauded. On February 5, the CBI booked billionaire diamond merchant Nirav Modi, his wife, brother, and a business partner for allegedly cheating Punjab National Bank of over Rs 2.80 billion during 2017.

The CBI has acted on a complaint from the PNB, which alleged that Modi, his brother Nishal, wife Ami and Mehul Chinubhai Choksi were in conspiracy with officials of the bank and cheated it, causing "wrongful loss".