Punjab National Bank head Sunil Mehta likely to appear before SFIO today

Mar 07, 2018, 06:53
Punjab National Bank head Sunil Mehta likely to appear before SFIO today

A consortium of 31 banks led by ICICI Bank has loans close to Rs 5,200 crore to Mehul Chokshi's Gitanjali Group. As per a Moneycontrol report, ICICI Bank has no exposure to Nirav Modi group of companies, but have given working capital loans along with a consortium to Gitanjali group. "Officials from the other banks will be also called for questioning", sources said. Modi, his family and Choksi had left the country in early January.

Earlier, a senior official of the ICICI Bank was summoned to the CBI office in Mumbai.

However, the two diamond traders, who are said to have left the country before criminal cases were registered, had failed to appear before the ED, promoting the agency to move the PMLA court for issuance of NBWs against them.

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ICICI Bank Ltd has an exposure of Rs750 crore to the Gitanjali group of companies and Rs500 crore to Gitanjali Gems. The ED has also traced some of the money being routed back to the banks for re-issuing letter of undertaking, or LoUs. The fraud investigative agency has recorded the statements of Axis bank representative in the case.

The CBI on Tuesday arrested Gitanjali Group Banking Operations Vice President Vipul Chetalia.

A LoU is a guarantee which is given by an issuing bank to Indian banks having branches overseas to grant short-term credit to the applicant. PNB has lent Rs 587 crore as working capital, while ICICI Bank has lent Rs 405 crore to Mr Choksi's firms.

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Indian lenders have come under increased scrutiny after steps taken by the RBI under the governorship of Raghuram Rajan forced bank officials to stop ever-greening bad loans. The other details about Chitalia's alleged role in the PNB fraud were not revealed.

Probe into one of India's biggest banking scams over lending extended to diamantaires - Nirav Modi and his maternal uncle Mehul Choksi, is widening.

This is separate from the Rs12,636 crore Punjab National Bank (PNB) fraud investigation, which involved fake letters of undertaking, he added.

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