CBI arrests three people in $1.8 billion PNB fraud case

Nirav-Modi1

As investigations into the Rs 11,400 crore scam at PNB gather momentum, officials at overseas branches of other banks, where the fraudulently issued Letter of Undertakings (LoUs) were encashed, are under scanner, sources said.

The Defence Minister while holding a number of documents, said that the Congress President Rahul Gandhi had benefited from the scam in which billionaire jeweler Nirav Modi and his partner Mehul Choksi are the prime suspects. In a freakish coincidence, the name of the villain is Nirav Choksi - an amalgamation of the two main accused in the present CBI case: Nirav Modi and Mehul Choksi.

"The fraud in PNB is a case of operational risk arising on account of delinquent behaviour by one or more employees of the bank and failure of internal controls", the Reserve Bank of India (RBI) said in a release on February 16.

While the CBI is scrutinising the details of LoUs and Letters of Credit submitted by the Punjab National Bank in the past few days, PNB's head office too has scrutinised its LoUs and submitted a report to the CBI. The ED has separately strengthened its searches at 35 premises and have got assets worth another Rs 500 crore, taking the stated value of confiscations to over Rs 5,600 crore until now. Prasad had also made a desperate plea to the PMO to stop the loot before Nirav Modi's uncle, Mehul Choksi fled the country just like Vijay Mallya and Lalit Modi did in the past.

TV Station NDTV on Friday reported he was at a suite in a hotel in NY, citing household staff who answered the door.

The foreign affairs ministry suspended their passports and warned these will be cancelled if they do not return to India in four weeks. The official checked the records which did not show such LoUs to Modi or Choksi's companies which led to suspicion.

After filing a second FIR in the case, the CBI arrested retired PNB Deputy Manager Gokulnath Shetty, Single Window Operator Manoj Kharat and authorised signatory of the Nirav Modi Group of firms Hemant Bhat on Monday.

Singhvi's reaction came after Sitharaman linked him, his wife and his son to Nirav Modi's business.

These LoUs and Letters of Credits (LC) worth Rs 11,384 crore were getting renewed or issued afresh during last six years without coming in the notice of the bank.

Modi and his associate are accused of getting PNB officials to facilitate huge loans using fake guarantees. At the same time, another public sector lender Union Bank of Indias exposure stood at United States dollars 300 million, while UCO Bank has to realise USD 411.82 million.

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