NEW DELHI: A parliamentary panel today questioned the finance ministry officials about the USD 1.77 billion fraud in the state-owned Punjab National Bank (PNB) and asked them to submit a report on it.
The Parliamentary Standing Committee on Finance, which met to deliberate upon the demands for grant, today asked the ministry officials including Secretary Financial Services Rajiv Kumar that how can the tax payers' money be used for recapitalising the bank which is not well managed.
"Members expressed their concern over such large scale fraud in the PNB and questioned the recapitalisation process of the state-run banks when they are not well managed and tax payers money is leaking," a member who was present in the meeting said.
The committee is headed by senior Congress leader Veerappa Moily and former prime minister Manmohan Singh is also a member.
"The committee has asked the finance ministry officials to submit a report before the panel on this fraud," another member who was present in the meeting told PTI.
Meanwhile, during the meeting, when asked, the finance ministry officials indicated that the health insurance scheme announced in the budget was included at the last moment, a member said.
The PNB issue came up as the state-owned bank had yesterday said it detected a USD 1.
77 billion (about Rs 11,400 crore) scam in which billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders.
PNB has suspended 10 officers and referred the matter to CBI for investigation.
While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.
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.
Foreign bank branches too are under investigation.
Last week, PNB had lodged an FIR with the CBI stating that fraudulent LoUs worth Rs 280.7 crore were first issued on January 16.
At the time, PNB had said it was digging into records to examine the magnitude of the fraud.
In the complaint, PNB had named three diamond firms -- Diamonds R Us, Solar Exports and Stellar Diamonds -- saying they had approached it on January 16 with a request for buyers' credit for making payment to overseas suppliers.