CBI seeks nostro account details from 5 banks

The Central Bureau of Investigation (CBI) has sought from the chief vigilance officers of five banks — Canara Bank, Bank of India, State Bank of India, Allahabad Bank, and Axis Bank — the details of financial transactions in the nostro accounts of Punjab National Bank (PNB) on the basis of 293 fraudulent letters of undertaking (LoUs) issued by it to jewellers Nirav Modi and Mehul Choksi, officials said on Monday.

The agency has also collected documents related to Nirav Modi from Cyril Amarchand Mangaldas, a leading law firm, at the start of the investigation, they said.

A nostro account refers to an account that a bank holds in a foreign currency in another bank overseas to enable foreign trade by its clients.

During the course of the searches after registering the FIR against Nirav Modi, the CBI felt that some files could be with the law firm, officials said, adding a team went to the office of the firm early this month and collected those documents.

The agency on Monday questioned three general managers of PNB who have handled the international banking division and treasury department of the bank, officials said.

The general managers handling these departments get daily reports of the transactions taking place in the nostro accounts of the bank, they said.

The overseas branches of the five banks in Antwerp, Frankfurt, Mauritius, Hong Kong, and Bahrain had credited over ~114 billion into the nostro account of PNB on the basis of the guarantees (LoUs) given by to Nirav Modi and Choksi, they said.

The agency has now written to the vigilance officers seeking details of these transactions to unearth the money trail of ~114 billion.

The agency is trying to figure out the circumstances in which transactions worth ~114 billion, almost nine times the profit of PNB reported in 2016-17, went unnoticed by the chain of officials in the public sector bank, they said.

The CBI also continued questioning of K V Brahmaji Rao, executive director of the bank, for the third day today.

Rao, who started his career in banking 35 years ago as a probationary officer in Vijaya Bank, handled among other assignments the Mumbai zone of the bank where the crime was allegedly detected, they said.

The agency has so far issued over 10 lookout circulars against senior executives of the companies of Nirav Modi and Choksi to restrict their movement, they said.

The circular alerts all ports of entry to restrict the movement of the person against whom the notice has been issued and report any such attempt to the issuing agency. The circular may seek detention of the accused at the port of entry, too.

The top brass of the agency has now issued clear instructions to the investigation teams to complete the probe in the cases of bank fraud timely.

The instructions have been issued after reports that in some cases the agency waited too long before filing the FIRs.

“CBI Director Alok Kumar Verma has directed the officers in-charge of these investigations to take all necessary steps to ensure that the bank fraud cases are concluded within a given time frame. He asked the officers not to spare anyone found involved in these scams,” CBI spokesperson Abhishek Dayal said.

One of the biggest financial scams of the country surfaced when company officials of billionaire jewellers Nirav Modi and Mehul Choksi approached PNB’s Brady House branch, Mumbai, in January this year seeking LoUs in favour of their companies for payments to their suppliers.

CBI quizzed 3 GMs of PNB who have handled its international banking division and treasury department. They get daily reports of transactions taking place in nostro accounts