Nirav’s PNB fraud started in 2008, arrested bank officials tell CBI
NEW DELHI: The practice of illegally issuing Letters of Undertaking (LoUs) and Foreign Letter of Credit (FLCs) and then rolling them over to favour Nirav Modi and Mehul Choksi groups started in 2008 and continued till these were discovered in January this year, according to CBI officials.
The illicit activities resulting in fraud of Rs 11,300 crore occurred under the nose of top Punjab National Bank officials but they claimed to be unaware of the scam.
The revelation came to the fore during questioning by CBI officials of Rajesh Jindal, who was holding the charge of Mumbai-based PNB’s Brady House Branch between August 2009 and May 2011, Gokul Nath Shetty, a retired Deputy Manager from the same branch who retired in May 2017, Bechu B Tiwari (Chief Manager, in charge of Forex Department), Yashwant Joshi (Scale II manager of Forex Department) and Prafful Sawant (Scale I officer, export).
The officials said they merely continued with the practice that started in 2008. It was not immediately clear who was in charge of the Forex Department when the illegal practice began.
The Central Bureau of Investigation (CBI) officials said the alleged multi-crore fraud by issuing LoUs and FLCs for sanction of loan to diamantaire Nirav Modi and his uncle Mehul Choksi’s group of firms continued during Jindal’s tenure.
Jindal, posted as GM Credit at PNB’s Head Office in New Delhi, was heading the second largest branch of the bank when the practice of issuing the LoUs without sanctioned limits continued.
Arrested on Tuesday night after his day-long questioning in Mumbai, he was the 12th accused to be held in the case so far. The CBI investigators had managed to get his custody till March 5 from the special CBI court on Wednesday.
Tiwari, Joshi and Sawant were also arrested on Monday for their alleged role in the scam and will remain in police custody till March 3.
All five PNB officials arrested so far were part of the forex department at the bank’s Brady House branch at the time of the fraud, said officials, adding these employees, in collaboration with the staff and associates of the firms headed by Nirav Modi and Choksi, committed wrongdoings for personal gains.
The first FIR in the scam registered on .