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PNB fraud: Finmin asks banks to submit status report soon

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February 14, 2018

Concerned over fraud of over Rs 11,300 crore at Punjab National Bank, the finance ministry has asked all banks to send reports involving this case or other such incidents latest by the end of this week. Earlier in the day, PNB disclosed some fraudulent transactions with financial implication of USD 1.77 billion (about Rs 11,334.4 crore).

The bank has detected some fraudulent transactions in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance, PNB said in a statement.

Based on these transactions, other banks appear to have advanced money to these customers abroad, it said. Since more than one lender is involved, all banks have been asked by the Department of Financial Services to submit a status report soon on the fraud, official sources said.

They said the Letter of Undertaking was issued fraudulently by PNB to billionaire diamond merchant Nirav Modi and associates and was encashed overseas by them from different banks, both private and public sector. All this was being carried out in connivance with officials as high as Deputy General Manager since 2011, sources added.

As a corrective measure, PNB has suspended 10 employees in connection with the fraud.(Agencies)

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