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PNB case: RBI, Sebi to seek help from Hong Kong regulators

Press Trust of India  |  New Delhi 

The Reserve Bank and the Sebi are likely to approach their counterparts in Hong Kong for cooperation in the matter relating to the whopping over Rs 11,000 crore fraud at where several entities have come under the scanner, officials said today.

The regulators are set to spread their net overseas as it has been found that credit was availed from various in Hong Kong on the basis of Letters of Undertaking (LoUs) issued by

Officials said the Reserve (RBI) would be approaching its counterpart (HKMA) to gather more details in the matter.

Similarly, the (Sebi) would be getting in touch with the (SFC).

According to the officials, the LoUs were mostly used for availing credit at Hong Kong-based branches of some other Indian banks.

An LoU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.

Several other entities which are in the diamond trade, including from South Africa, are also under the lens, they added.

Further, the officials noted that another public sector bank, which is currently under the scanner for business dealings with a South African group, is also being probed as the two cases might be linked.

today said it has detected a USD 1.77 billion (about Rs 11,400 crore) scam where billionaire allegedly acquired fraudulent letters of undertaking from a branch in to secure overseas credit from other Indian lenders.

While did not name the other lenders, Union Bank of India, and are said to have offered credit based on LoUs issued by PNB.

Three other jewellers, Gitanjali, Ginni and Nakshatra are under the scanner with CBI and ED looking at their arrangements with various banks and end use of money, a of a said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 14 2018. 22:45 IST