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Pun­jab Na­tional Bank (PNB) has said that the al­leged fraud per­pe­trated by jewellers Ni­rav Modi and Me­hul Choksi may be around USD 2 bil­lion, over USD 204 mil­lion more than pre­vi­ously es­ti­mated. The state-owned lender said that "the quan­tum of re­ported unau­tho­rised trans­ac­tions can in­crease by USD 204.25 mil­lion." The bank had ear­lier put the de­frauded amount at Rs 11,394.02 crore (USD 1.77 bil­lion). Adding an­other Rs 1,323 crore would take this to Rs 12,717 crore. PNB said it has not re­ceived any in­struc­tion from the gov­ern­ment to com­pen­sate other lenders for losses aris­ing out of the fraud. The jewellers and com­pa­nies linked to them had al­legedly col­luded with PNB of­fi­cers to ob­tain fake bank guar­an­tees to get loan from over­seas branches of In­dian banks in­clud­ing Al­la­habad Bank, Axis Bank and UCO Bank. The bank has enough cap­i­tal/as­sets to pay for such li­a­bil­ity in case of even­tu­al­ity in ac­cor­dance of law, PNB said in a sep­a­rate state­ment to stock ex­change made last night. In fil­ings in Fe­bru­ary, PNB said it stum­bled upon the scam on Jan­uary 25, 2018, and a fraud re­port was filed with the Re­serve Bank of In­dia 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 and Chan­dri Pa­per & Al­lied Prod­ucts Pvt Ltd, as also a com­plaint filed with En­force­ment Direc­torate. Stock ex­changes were in­formed the next day, PNB had said in the fil­ings. In the com­plaint, PNB al­leges that Modi and com­pa­nies linked to

him col­luded with some of its of­fi­cers in­clud­ing a for­mer deputy gen­eral man­ager Gokul­nath Shetty, who was posted in the for­eignex­change de­part­ment of its Mum­bai branch. They fraud­u­lently ac­quired guar­an­tees 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 for mak­ing pay­ment to the over­seas sup­pli­ers," PNB had said. This hap­pened af­ter Shetty had re­tired. And since there was no sanc­tioned limit for the firms, the branch of­fi­cials asked them to fur­nish at least 100 per cent cash mar­gin for is­su­ing Let­ter of Un­der­tak­ing (LoU) for rais­ing buyer's credit. "On de­nial, the firms con­tested that they have been avail­ing such trans­ac­tions since past sev­eral years," PNB had said. On scru­tiny, it was found that ear­lier LoUs were is­sued pre­vi­ously and in­ter­nal mes­sag­ing sys­tem was by­passed by plac­ing in­struc­tions via the SWIFT global pay­ment sys­tem ask­ing over­seas branches of In­dian banks to fork out the cash as loans. PNB said this fol­lowed a se­ries of meet­ings with rep­re­sen­ta­tives of Ni­rav Modi group and Gi­tan­jali group at Delhi and Mum­bai "to im­press upon them to pay the amount." "Upon con­firm­ing the first ma­tu­rity of LoUs li­a­bil­i­ties on Jan­uary 25, 2018 as fraud­u­lently credit against bank, an FMR-1 (fraud re­port for­mat of RBI) was sub­mit­ted to the RBI on Jan­uary 29, 2018 amount­ing to USD 44.22 mil­lion equiv­a­lent to Rs 280.70 crore (re­lated to three group firms of Ni­rav Modi)," it had said. On that day, a crim­i­nal com­plaint for reg­is­tra­tion of FIR was also made to CBI. On Fe­bru­ary 7, an­other fraud re­port was sub­mit­ted to the RBI on con­firm­ing the ma­tu­rity of LoUs li­a­bil­ity of USD 10.20 mil­lion (Rs 65.25 crore) re­lat­ing to two com­pa­nies of Gi­tan­jali group pro­moted by Me­hul Choksi. Fur­ther, LoUs of USD 59.23 mil­lion (Rs 279.28 crore) also ma­tured for Ni­rav Modi group, it said adding while in­ves­ti­ga­tion was on 10 of­fi­cers/em­ploy­ees were sus­pended. Hong Kong branches of Al­la­habad Bank and Axis Bank were asked to pro­vide all com­mu­ni­ca­tion with bor­rower, PNB said. "On Fe­bru­ary 12, 2018, on the ba­sis of in­ves­ti­ga­tion re­port, to­tal fraud of Rs 11,394.02 crore in case of unau­tho­rised is­suance of Let­ters of Un­der­tak­ings, For­eign Let­ter of Cred­its and In­land Let­ter of Guar­an­tees in the group ac­counts of Ni­rav Modi Group and Gi­tan­jali Group and in ac­count of Chan­dri Pa­per and Al­lied Prod­ucts Pvt Ltd was re­ported to RBI," it had said.

Ni­rav Modi, Jew­eller and busi­ness­man

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