Indian banks taking hit of $3 bn due to PNB fraud is false news: Govt

The fraud involved issue of illegal letters of undertaking and foreign letters of credit favour Nirav Modi and Gitanjali group of companies which were unauthorised by bank

The finance ministry on Monday clarified that news circulating that tax department has estimated Indian banks could take a hit of more than $3 billion pertaining to $1.8 billion Punjab National Bank (PNB) fraud, is false.

"News appearing in certain section of media that Tax Department has estimated that Indian banks could take a hit of more than $3 billion due to alleged fraud at PNB, is false & factually incorrect," the finance ministry clarified through a tweet.

The fraud involved issue of illegal letters of undertaking and foreign letters of credit favour Nirav Modi and Gitanjali group of companies which were not authorised by the bank. The Central Bureau of Investigation and the Enforcement Directorate the Rs 114 billion bank fraud.