India to meet 31 bank chiefs in PNB fraud probe

MUMBAI: Federal investigators are seeking to question the chiefs of India’s biggest lenders as they widen their probe into the US$2 billion (RM7.81 billion) fraud at Punjab National Bank (PNB).

The Enforcement Directorate had written to the heads of 31 banks asking to meet officials about the fraud, according to people familiar with the matter.

The investigators would start with state-run PNB today and subsequently cover the other lenders, said the people.

Separately, the Serious Fraud Investigation Office summoned Chanda Kochhar, chief executive officer at ICICI Bank Ltd, and Shikha Sharma, her peer at Axis Bank Ltd, for a meeting yesterday, CNBC TV18 reported. Both private lenders reportedly have exposure to at least one of the two jewellers that allegedly masterminded the fraud.

The stock exchange had sought clarification and was awaiting a reply from ICICI Bank and Axis Bank, it said on its website.

The fraud was disclosed about a month ago, when PNB alleged that the jewellers colluded with some PNB officials to get fake letters of undertaking, which they used to obtain loans from the overseas branches of Indian banks.

Investigators claimed the scam had been running since 2011 and involves multiple regulatory infractions, leaving a web of lenders embroiled in questions about the quality of their compliance.