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PNB denies reports of shutting down fraud-hit Brady House branch in Mumbai

PNB's Brady House branch in Mumbai had fraudulently issued LoUs for the group of companies belonging to Nirav Modi since March 2011

Press Trust of India  |  New Delhi 

punjab national bank, pnb

Fraud-hit (PNB) today said it has no plans to close operations at its Brady House branch, the fountainhead of the Rs 140 bn scam.

Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 140 bn through issuance of fraudulent Letters of Undertaking (LoUs).

PNB's in Mumbai had fraudulently issued LoUs for the group of companies belonging to since March 2011.

"PNB has no plans to close operations in the in Mumbai. Reallocation of some of the accounts is part of the regular restructuring process at PNB to strengthen internal systems and processes and centralize certain critical functions," a spokesperson of the bank said.

Retail operations for PNB customers continue to operate from the branch, the official said.

With regards to provision made for the loss incurred on account of the fraud, the bank provided Rs 71.7 bn, 50 per cent of the total amount of Rs 143 bn, in the fourth quarter of 2017-18. The remaining amount will be covered in the three quarters of the current fiscal year.

PNB paid Rs 65.86 bn to other to discharge its liabilities towards Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) issued fraudulently and in unauthorised manner to certain overseas branches of Indian through the misuse of SWIFT system of the bank, which was then not integrated with CBS (Core Banking Solution).

First Published: Tue, July 03 2018. 21:49 IST
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