Banks start confessing to exposure

A report by Bloomberg on the PNB scam has indicated that Allahabad Bank has an exposure of about Rs. 4,000 crore, Axis Bank roughly Rs. 3,000 crore, and the Union Bank about Rs. 2,000 crore. These were the banks that were said to have offered credit based on Letters of Undertaking issued by the PNB.

Certain banks on the periphery of the scam -- the Bank of Baroda, for instance -- has said it did not discount any letters of undertaking for companies involved in the fraud; however, it does have a direct exposure of less than Rs 4.5 billion to these companies. Also, the bank claims it has collaterals.

The Union Bank, too, admitted to an exposure of USD 300 million, or around Rs 1,915 crore, but stressed its money is safe and that it will recover it.

Separately, the State Bank of India stated it does not have any direct exposure to the high profile fraudster Nirav Modi, but the publicsector lender does have an "exposure" to the tune of $212 million by way of a Letter of Undertaking issued by the PNB.

SBI chairman Rajnish Kumar also admitted to "a small exposure to Gitanjali Gems", owned by Modi’s

uncle, Mehul Choksi, but said ‘‘it is not a point of worry". "The total loans of the SBI come to Rs 16 lakh crore, and the exposure to the gems and jewellery business is less than Rs 13,000 crore," Kumar added.