Media Eye News Bureau: Punjab National Bank discovered fraudulent transactions of around Rs11, 400 crore in Mumbai and filed a complaint with the Central Bureau of Investigation (CBI) for the same.
Jeweller Nirav Modi is already being investigated by CBI in connection with the fraud case along with an earlier complaint by the same bank. The complaint was about fraudulent transactions of Rs 280 crore. The bank later stated that it was checking if the magnitude of the swindle was more at the time.
The finance ministry issued an advisory regarding the crisis and asked all banks to review all their large exposures or total loans to one customer and also requested the Enforcement Directorate (ED), which investigates frauds involving foreign currency and transactions, to investigate the matter after which the ED registered a money laundering case Nirav Modi and others on the basis of the CBI FIR.
The fraud was reportedly carried out by PNB employees who apparently issued authorized letters of understanding that helped Modi’s companies raise credit and did so without making any entries in the bank’s books or recording them in the core banking system.
Reportedly, the international branches of many other Indian banks including Allahabad Bank, Axis Bank, State Bank of India, Union Bank of India and others loaned money to Modi’s companies based on these fraudulent guarantees.
The CBI booked Modi and several members of his family and stated that they used the firms Diamond R Us, Solar Exports, and Stellar Diamonds to conspire with bank officials to cause Punjab National Bank ‘wrongful loss.’
