JEWELLER NIRAV PLUNDERS PNB

■ Fraud uncovered through the SWIFT trail, said the bank

Punjab

National Bank ( PNB), India’s secondlargest state- owned bank, said on Wednesday that it has detected a ` 11,346 crore fraud at a Mumbai branch, the impact of which could extend to other lenders as well.

Billionaire diamantaire Nirav Modi, 47, and his associates have been accused of involvement in the fraud, along with some senior PNB officials, and the matter has been referred to law enforcement agencies for probe and recovery.

In a caution letter issued to other banks, PNB said that it was found through the SWIFT trail that one junior level official unauthorisedly and fraudulently issued Letters of Undertaking ( LoUs) on behalf of some companies belonging to Nirav Modi Group.

The companies were maintaining only current accounts with the branch and none of the transactions were routed though the Centralised Banking System, it said.

Similar modus operandi was used by the same official for companies belonging to Gitanjali Gems promoted by Mehul Choksi.

“The fraudulent act was found out when subsequent to superannuation of the concerned official, the same companies again approached the branch for availing LoUs,” it said.

The CBI officials were quoted in agency reports as saying that they had received two complaints from PNB against Mr Modi. PNB has also involved the enforcement directorate to track the money trail.

“Four big jewellers — Gitanjali, Ginni, Nakshatra and Nirav Modi — are under scanner,” a senior bank official said.

Finance ministry has asked all banks to send reports linked to this case or other such incidents by the end of this week. However, it sought to allay worries over the fraud case at PNB saying it was not “out- of- control” and action is being taken.

RBI has undertaken a supervisory assessment of control systems in PNB, while Sebi has launched a probe into trading and disclosure related issues in the matter of Punjab National Bank and Gitanjali Gems.

The Enforcement Directorate has seized over 5,600 crores worth of diamonds, jewellery and gold and is continuing the searches at showrooms and offices linked to firms run by Nirav Modi and his uncle, Mehul Choksi.

Two PNB employees, deputy general manager Gokulnath Shetty and single window operator Manoj Hanument Kharat, whom the bank had named in its FIR, have been arrested by the CBI.

Acting against two absconding businessmen, the passport issuing authority in the Ministry of External Affairs has suspended validity of passports of billionaire jeweller Nirav Modi and his business partner and uncle Mehul Choksi with immediate effect for a period of four weeks on the advice of the Enforcement Directorate.

The two fraudsters have been asked to respond within one week as to why their passports should not be impounded or revoked.

If they fail to respond to the notice within the stipulated time, the external affairs ministry will go ahead with the revocation of their passports.