PNB to Nirav Modi: 'Come With Concrete Plan to Pay Dues'
The bank on Thursday asked Nirav Modi to come up with a concrete and implementable plan to settle the loss caused to it by the fraudulent issuance of Letter of Undertakings (LoU) through one of its branches.
New Delhi, February 22: Punjab National Bank (PNB), the second-biggest state-run lender on Thursday said that it has enough assets/ capital to meet any liability which is decided as per law. In its recent statement, PNB said that it has followed lawful avenues to recover its dues following fraudulent and unauthorised transactions totalling $1.77 billion (Rs 11,400 crore) at the Mumbai branch by jewellery designer Nirav Modi and his associates.
The bank on Thursday asked Nirav Modi to come up with a concrete and implementable plan to settle the loss caused to it by the fraudulent issuance of Letter of Undertakings (LoU) through one of its branches. "You were getting LoUs issued illegally and in an unauthorized way through few bank officials. At no stage such facilities were extended by our bank to your three partner firms," sources said citing mail response sent by PNB General Manager (international banking division) Ashwini Vats to Nirav Modi.
In his letter, Nirav Modi had said to the bank that the over-zealousness on the part of the bank to deal with the issue destroyed his jewellery brand and also jeopardised his ability to clear the dues. PNB on Thursday reaffirmed that it has enough assets to meet any liability. “We have followed lawful avenues available to us as per law of the land to recover our dues,” the bank said in a regulatory filing.
The recent fraud that came to light in the last week is by far the biggest ever detected by an Indian bank and is believed to have hurt the country’s economic recovery. In its preliminary investigation report, the PNB said, “Upon receiving further investigation report enhancing the fraud amount to Rs 11,394 crore, FMR (Fraud Monitoring Return) with RBI, FIR with CBI were filed in the evening of February 13, 2018, and BSE and NSE were informed on February 14 around 9 am”.
As per reports, a PNB official from Mumbai filed a criminal complaint with the Central Bureau of Investigation (CBI) on January 29 against three companies and four people, including billionaire jeweller Nirav Modi and Mehul Choksi, the managing director of Gitanjali Gems Ltd, saying they had defrauded the bank and caused a loss of $43.8 million or Rs 280 crore.
(The above story first appeared on LatestLY on Feb 22, 2018 06:55 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).