"Punjab National Bank has come across certain fraudulent Letter of Undertakings (guarantees) issued by two of its employees namely Gokulnath Shetty and Manoj Hanument Kharat at Brady House Branch Mumbai in connivance with a firm belonging to Nirav Modi, Nishal Modi, Ami Nirav Modi and Mehul Chinubhai Choksi partners of M/S Diamond R USA, M/S Solar Exports and M/S Stellar Diamond", the bank had said in a statement, reported News18.
Scam-hit PNB today said Nirav Modi, who allegedly defrauded the bank of about Rs 11,400 crore, has come up with "some vague offers" to repay the amount, even as the Enforcement Directorate continued raids at properties connected with the jeweller designer.
The Central Bureau of Investigation (CBI) has sealed the residence of Ami Modi, wife of Nirav Modi in Mumbai's Worli in connection with Punjab National Bank (PNB) fraud case involving her husband and businessman Nirav Modi. The bank when denied the request, Nirav companies said they had earlier used the facility for many years.
The fraudulent transactions are reportedly linked to billionaire diamond merchant Nirav Modi, against whom the bank had filed a complaint with the CBI last month.
The PSU Banking Index fell 1.1% mainly due to PNB, Bank of Baroda, IDBI and Syndicate Bank.
"We have issued advisory as well to them". The Finance Ministry said it wants lenders to work on improving customer responsiveness, responsible banking, deepening financial inclusion and digitalization, and staff development. "Yet, the Modi government would have us believe that this entire fraud was being perpetrated by two employees", he said.
The PNB chief said the fraud was detected on Jan 25 and was reported to the investigative agencies, including the CBI on Jan 29.
He added that Prime Minister Modi government mismanaged risk management system of the banking system.
The bank claimed that some of its staff members from a branch in Mumbai had issued fraudulently prepared Letters of Undertakings (LOUs) on behalf of Nirav Modi's firms, allowing them to raise short-term funds through overseas branches of Indian banks for the goal of importing unpolished diamonds and precious stones.
In this case, the bank will also come under the scope of the investigation. "This stipulation was overlooked by overseas branches of Indian banks, who are also required to follow RBI guidelines", Punjab National Bank wrote in a confidential letter to 30 banks, seen by Nikkei Asian Review. "Assets worth Rs 1,300 crore have been seized and the passports have been revoked, along with circulating a look-out notice", he told reporters at a press conference. The bank at its full capacity will take every action to book wrongdoers.
Mehta further said that the government too was examining the issue on day-to-day basis. "But theyre coming out with some vague offers, which are under examination", Mehta said.
A look out circular has also been issued by enforcement agencies to all exit and entry ports to inform them about the movement of the accused.
On Thursday, PNB shares sank more than 14 percent, its biggest fall since 2009, after having dropped 9.8 percent the day before.