Published: Thu, March 08, 2018
Tech | By Dwayne Harmon

Top Indian private banks under scanner in bank fraud probe

Top Indian private banks under scanner in bank fraud probe

A consortium of 31 banks, led by ICICI Bank, had lent about Rs 5,300 crore working capital to Mehul Choksi-led Gitanjali Gems, while Modi firms Stellar Diamonds, Solar Exports and Diamonds together borrowed about Rs 4,000 crore, of which PNB's exposure stands in excess of Rs 1,700 crore.

Clarifying the need for summoning the bank chiefs, the official said there were discrepancies in the declarations made by the company to different banks.

On January 31, the agency had registered an FIR pertaining to LoUs worth over Rs 6,400 crore against the diamond trader.

Choksi and Modi are accused of defrauding the PNB of Rs. 12,600 crore, with Rs. 1,300 crore being added to the fraud total February 26. The second FIR relates to the issuance of LoUs and foreign letters of credit to firms owned by Mehul Choksi, Modi's maternal uncle.

Our Bureau Finance Minister Arun Jaitley on Tuesday came in support of scam-hit Punjab National Bank (PNB) and asserted that the bank, like the Indian economy, has sound fundamentals and strong growth potential.

The agency has issued Letter of Request (LRs) to ten countries seeking details of bank accounts of Modi, Chokshi and the shell companies. The bank's exposure to these entities is about Rs200 crore, it added.

The consortium comprises 30 public sector banks and nine private and multi-national banks.

Currently, the investigative agency has shortlisted top 140 shell companies on a priority basis, for an in-depth probe.

The CBI has alleged that Shetty, a retired deputy manager of PNB, fraudulently issued 143 LoUs.

The PNB said that cases of circular transactions between Nirav Modi-promoted partnership firms Solar Exports, Stellar diamonds and Diamond R USA and Nirav Modi-promoted Firestar Group of companies - Firestar International Ltd (FIL) and Firestar Diamonds International Pvt Ltd (FDIPL) - came to its notice.

"Most of these documents are not yet recovered".

Finance minister Arun Jaitley, however, told parliament on Tuesday that PNB had "sound fundamentals and strong growth potential" with its high share of low-priced current and savings accounts deposits, stabilising bad loans and scope to raise funds by selling non-core assets.

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