CBI BOOKS EX-PNB DEPUTY MANAGER IN BRIBERY CASE
Press Trust of India
The CBI has booked retired deputy manager Gokulnath Shetty, the main accused in the ₹13,000-crore Punjab National Bank fraud allegedly perpetrated by Mehul Choksi and Nirav Modi, in a fresh case of receiving a bribe of ₹1.08 crore from Rishika Financials that arranged bank guarantees for Gitanjali Gems, officials said.
It is alleged that the owner of Rishika Financials, Debajyoti Dutta, was in the business of arranging quotes of Letters of Undertaking (LoUs) from foreign funding banks, they said on Monday.
The officials said that after getting confirmation from Dutta, Shetty used to issue LoUs using the international banking messaging service, SWIFT.
Dutta used to work for Gitanjali Gems, promoted by Choksi, and had allegedly raised bills of 0.05% of the LoUs issued for the firm as brokerage, they said.
The amount used to get credited to Dutta’s current account from which 40%, over ₹1.08 crore, was allegedly paid to Shetty between 2014 and 2017, the officials said.
LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to an applicant.
In case of default, the bank issuing the LoU has to pay the liability to the credit-giving bank along with accruing interest.
The companies of Modi and Choksi took loans from banks abroad on the basis of LoUs but did not repay them transferring the liability on Punjab National Bank (PNB). It is alleged that Shetty bypassed PNB’s core banking system, Finacle, and issued LoUs fraudulently, the officials said.
Shetty, who is alleged to have played a key role in the ₹13,700-crore loan fraud while working as deputy manager at PNB’s Brady House branch in Mumbai, was arrested in March, 2018.
The RBI has so far cut interest rates by 115 basis points this year and adopted a US Federal Reserve-style Operation Twist.
Bloomberg
The Reserve Bank of India’s decision to double secondary market bond purchases and its preference for a soft yield-control policy suggest Governor Shaktikanta Das plans to keep the government’s borrowing program afloat without breaking the monetary taboo of direct financing.
The restraint contrasts with some emerging-market central banks, including in Indonesia, that have agreed to buy billions of dollars of bonds directly from their governments to fill funding gaps amid the pandemic-fueled downturn. That approach carries risks, especially for inflation, the currency and the