Axis Bank today said it is an active participant in the secondary market for transactions against letters of undertaking and it "sold down" certain such dealings with Punjab National Bank.
Referring to media reports about certain buyer's credit transactions with PNB, which is at the centre of a Rs 114 billion fraud case, it said that in the normal course of business, the bank undertakes such transactions against letters of undertakings (LoUs) issued by other banks through its overseas branches.
"These amounts are then credited to the LOU issuing bank's Nostro accounts. Axis Bank has in the past undertaken such transactions with PNB against their authenticated SWIFT LOUs," it said in a regulatory filing. SWIFT is a software to perform such transactions.
"Axis Bank is also an active participant in the secondary market for such transactions, and the Bank has sold down all of the referred transactions," it added.
State-owned Punjab National Bank had yesterday said it has detected a $1.77 billion (about Rs 114 billion) scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.
Stock of Axis Bank today closed 0.17 per cent down at Rs 543 on BSE.