PNBdelayed fraud complaint by 4 days

New Delhi, Feb. 16: Punjab National Bank has said it filed the first fraud report with the RBI and the CBI four days after it stumbled upon the alleged ` 11,394.02 crore fraud by diamantaire Nirav Modi, and made regulatory disclosures only after 10 days.

After stock exchanges sought clarifications on the fraud, PNB in a late night filing detailed the sequence of events and how Modi and companies linked to him used fake bank guarantees worth $ 1.77 billion to obtain loans from the overseas branches of Indian banks.

PNB stumbled upon the scam on January 25, 2018, and a fraud report with the RBI on January 29. On that day, a criminal complaint for registration of FIR was also made with the CBI. Stock exchanges were informed of the fraud on February 5.

This was followed by another fraud report being submitted to the RBI on February 7, the day one more complaint was filed with the CBI. On February 13, an FIR was filed with the CBI against Nirav Modi Group, Gitanjali Group, etc as also a complaint filed with Enforcement Directorate. Stock exchanges were informed the next day, PNB said.

In the complaint, PNB alleges that Modi and companies linked to him colluded with some of its officers including a former DGM Gokulnath Shetty. They fraudulently acquired guarantees worth $ 1.77 billion to obtain loans from the overseas branches of Indian banks, claiming to need the cash to import pearls.

“On January 16, 2018, the partnership firm of Nirav Modi group approached our branch at Brady House, Mumbai and presented a set of import documents with a request to allow buyers’ credit. On denial, the firms contested that they have been issued LoUs earlier,” PNB said in the filing.