Punjab National Bank's Rs.11,360 crore fraud case: ​10 points

The scam of Punjab National Bank (PNB) that recently came to limelight has been garnering attention and here is a summary of the case in ten points.

Published: 15th February 2018 12:09 PM  |   Last Updated: 15th February 2018 12:25 PM   |  A+A-

Image for representational purpose only. (Reuters)

By Online Desk

The scam of Punjab National Bank (PNB) that recently came to limelight where they have discovered fraudulent transactions by the jeweller and billionaire Nirav Modi worth 11,360 crores has been garnering attention and here is a summary of the case with major ten points to know:

  1. On Wednesday, state-owned Punjab National Bank revealed that they discovered fraudulent transactions of up to Rs 11,360 crores ($1.77 billion) by jeweller and billionaire Nirav Modi who secured overseas credit from Indian lenders based on illegally obtained letters of undertaking (LoU) he acquired from a branch in Mumbai.

  2. The case has been handed over to Central Board of Investigation (CBI) and ten officials have been suspended so far.

  3. According to news agency Press Trust of India (PTI), several other jewellery brands like Gitanjali and Nakshatra and Ginni will be investigated after the PNB case was uncovered.

  4. Along with PNB, Axis Bank, Allahabad Bank and Union Bank of India have reportedly lent loans and credit to Nirav Modi based on the fraudulent letters of undertaking. Foreign Bank branches too are under scanner. Not only private banks but public and foreign banks are also involved in the scam ,according to CBI sources as reported by NDTV.

  5. Due to the controversial unearthing of scam, the shares of Punjab National Bank, country's second-biggest state-run lender and fourth-biggest overall by assets, fell by 9.8 per cent.

  6. A case under the Prevention of Money Laundering Act (PMLA) has been registered by the Enforcement Directorate (ED) along with cheating on the basis of CBI FIR as reported by Times of India.

  7. In the alleged case of swindling of money along with Nirav Modi, his wife Ami, brother Nishal and some other partners of Diamond R US, Solar Exports and Stellar Diamonds are also involved and named in the CBI FIR.

  8. The alleged fraud came to light when Nirav Modi's company requested for another loan on the basis of the fraudulent letters of undertaking last month. When asked to provide guarantees to the letters of undertaking the company said, they have availed the facility before too. This prompted the bank to start the investigation.

  9. Securities and Exchange Board of India (SEBI) will also be investigating the lapses by the bank and other companies including jewellery firms named under the scam.

  10. Nirav Modi is the founder of Firestar Diamond and his company holds a value of USD 2.3 million. Apart from having stores in Mumbai and Delhi, he has showrooms in three other continents- in London, New York, Las Vegas, Hawai, Singapore, Beijing and Macau. Global star Priyanka Chopra is the brand ambassador of his brand.

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