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Rs 110-bn PNB fraud: Govt asks banks to submit status report by weekend

The bank has detected some fraudulent transactions in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance, PNB said

Press Trust of India  |  New Delhi 

Punjab National Bank
A photo of Punjab National Bank's M C B Brady House branch in Mumbai (Photo: Kamlesh Pednekar)

Concerned over fraud of over Rs 113 billion (Rs 11,300 crore) at (PNB), the ministry has asked all to send reports involving this case or other such incidents latest by the end of this week.

Earlier in the day, disclosed some with financial implication of $1.77 billion (about Rs 11,334.4 crore).

The bank has detected some in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance, said in a statement.

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

Since more than one lender is involved, all have been asked by the Department of Financial Services to submit a status report soon on the fraud, official sources said.

They said the Letter of Undertaking was issued fraudulently by to billionaire diamond merchant Nirav Modi and associates and was encashed overseas by them from different banks, both private and public sector.

All this was being carried out in connivance with officials as high as Deputy General Manager since 2011, sources added.

As a corrective measure, PNB has suspended 10 employees in connection with the fraud.

The ministry has asked, through the reform agenda circulated to the banks on January 24, that dubious accounts should be scrutinised and appropriate action against fraudsters be taken with zero tolerance, sources said.

Banks should not dither from taking action against their own employees in case of collusion if there is sufficient ground, they added.

Meanwhile, the bank has also lodged complaint with the CBI against billionaire jewellery designer Nirav Modi and a jewellery company about worth Rs 100 billion (Rs 10,000 crore).

The agency received the complaints about the transactions detected by the public sector bank late last night, the sources said.

The allegations are being looked into and future course of action will be decided soon, they said.

Agency sources said Modi is already facing a CBI probe on a complaint from the

This is the second incident in less than 10 days where a bank has been defrauded by the same person.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, February 14 2018. 18:01 IST