PNB scam: Banks relied on Ind-Ra's rating of Nirav Modi firm to lend money

In March 2017, Ind-Ra said it had rated the company's debt instruments at 'IND A-' with a stable outlook

The Fitch-owned India Ratings (Ind-Ra) gave a Ind A- outlook to Nirav Modi's flagship company, Firestar International Private Limited (FIPL), even though the firm was suffering from a high-leverage, off-balance-sheet exposure. Indian banks, including Punjab National Bank (PNB), relied on this rating to lend huge sums to the company.

Ind-Ra's officials said they were in discussions with the company till December 2017, for they needed more information, and placed FIPL and other group companies on rating watch with negative implications on Thursday, a day after PNB informed the stock exchanges about its loss. An Ind-Ra official said, as a policy,