SERIOUS LAPSES BY OVERSEAS BRANCHES

The Punjab National Bank has sent a letter to other banks, including some private and public sector banks, about the modus operandi of Nirav Modi group and Gitanjali Gems Ltd.

This letter circulated by the PNB, which was obtained by the Free Press Journal, alleges that some overseas branches of Indian banks did not adhere to RBI guidelines.

The bank has alleged that the suspected fraud was carried out with the help of the PNB staff who issued letters of undertakings on behalf of companies belonging to the Nirav Modi Group to avail of buyers’ credit from overseas branches of Indian banks.

However, none of the overseas branches of the Indian banks shared with the PNB any information made available to them by the above stated companies at the time of availing buyers’ credit.

The letter also points out a few issues that bring overseas branches under the scanner. Firstly, LoUs were issued for a period of one year. But as per RBI guidelines, the total time period ought to be 90 days from the date of shipment. This requirement was allegedly “overlooked by overseas branches of Indian banks.”

This letter, which has details of the modus operandi, has been sent to Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Catholic Syrian Bank, Dena Bank, Dhan Laxmi Bank, lClCI Bank and IDBI Bank, among other.

It is not clear if these were the Indian banks whose overseas branches were involved.