PNB fraud case: Congress accuses of PM letting ‘Chhota Modi’ escape

Indian jeweler Nirav Modi, who rose to fame in a very short span, has been charged with money laundering by the Enforcement Directorate after Punjab National Bank (PNB) reported a fraud scam of around Rs 11,400 crore.

Last month, Punjab National Bank (PNB) – India’s second-biggest state-owned lender – approached the Central Bureau of Investigation alleging that Modi and members of his family defrauded it of 2.8 billion rupees (RM171 million).

While jewellery designer Nirav Modi finds himself in the eye of the storm with the Rs 11,400-crore Punjab National Bank fraud, his partners in crime are feeling the heat too. “ED is also seizing the properties, seizing the current assets and we hope we will be able to recover good amount”.

Calling it the biggest bank scam since 71 years of independence, Surjewala said, “Many banks will have to pay collaterals”.

PNB, which issued the LoUs, will now have to reimburse the banks that honored them, potentially causing severe stress to PNB’s balance sheets. “We want to convey to all our stakeholders that PNB is pursuing clean banking agenda as a responsible bank”.

“A lot of people travel to Davos, we don’t facilitate them”.

The Congress said that the PMO acknowledged the complaint but the PMO, the Finance Minister and the Financial Intelligence Unit (FIU) did not act firmly on the complaint to stop the designer-businessman from fleeing India.

While the government desperately tried to explain the situation, a potentially more disturbing revelation has come to light.

Defence Minister Nirmala Sitharaman reportedly blamed the UPA Government for the PNB Scam and said that this was detected during the present government.

Briefing media on behalf of the government, Law and Information Technology (I-T) Minister Ravi Shankar Prasad said, “I wish to make it very clear and this I can also convey on the behalf of the govt that no shall be spared in the banking system who has sought to derail ordinary banking system to help Nirav Modi”.

Other bank that touched its 52-week low is Oriental Bank of Commerce falling 0.29% but conversely closed with the highest gain in PSU Banking Index of 1.35%. Apparently the branch staff issued fake LoU (Letter of understanding) for buyer’s credit to companies of Nirav Modi and Gitanjali Group.

The case in point was that of billionaire diamond jeweller Nirav Modi who left the country on Jan 1 this year.

“The bank in its full capacity will take every action to book wrongdoers”.

“This fraud had started in 2011”.

A look out circular has also been issued by enforcement agencies to all exit and entry ports to inform them about the movement of the accused.

Mehta further said that the government too was examining the issue on day-to-day basis.

Despite tight fiscal conditions, the government recently extended a $14 billion bailout to ailing state banks as part of a broader $32 billion rescue plan.

He said he came to realise the margins were better in retail.