PNB fraud: CBI arrests three including two PNB officials

PNB fraud: CBI arrests three including two PNB officials

The Aam Aadmi Party (AAP) has alleged that despite Centre's knowledge, banking scam kingpin Nirav Modi was successful in fleeing the country after duping PNB of Rs 11,515 crore, and added that Prime Minister Narendra Modi is answerable for the fraud.

The third person arrested was Hemant Bhat, described as the "authorized signatory" of the companies tied to Modi, accused of embezzling about $44 million from the bank.

CBI officials escort former PNB deputy manager Gokulnath Shetty, arrested in the Nirav Modi banking scandal, into a special Mumbai court on Saturday. No charges have yet been laid.

Earlier this week, fraud-hit PNB said it will honour its bonafide commitments and entire liability will be known after the investigation. The other two stood passively.

In its FIR, the CBI named Shetty and Kharat and accused them being in connivance with accused companies and directors. Will PM Modi order an inquiry on the PNB scam.

There are at least four registered companies and four LLPs in India where Modi is a director, though he does not hold directorship at numerous entities supposed to be associated with him including some bearing his own name.

People wait in a queue outside a Punjab National Bank ATM in New Delhi, India, February 16, 2018.

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Although the data does not reveal the financial losses that the banks suffered due to insiders involved in fraud, separate data from the RBI for the period between April 1, 2013, and December 31, 2016, shows that all commercial banks lost a total of Rs 66,066 crore due to 17,504 instances of fraud.

Indian broadcaster NDTV reported on Friday that Modi was staying at an apartment in New York's Manhattan.

On Saturday, a police source said that the CBI had sent a notice through Interpol in a bid to help locate Modi. It conducted further searches at 21 locations and seized diamonds, gold, precious stones/ metals and jewellery worth Rs 25 crore (Book Value).

PNB's disclosure on Wednesday that it had suffered massive fraud has sparked a widening probe involving various Indian authorities.

The Income-Tax Department today attached nine bank accounts of Gitanjali Gems, its promoter Mehul Choksi and others in connection with a tax evasion probe against them.

"Public sector unit (PSU) banks, ironically, are slipping from one crisis to the other and there is a limit the government can keep bailing them out at the cost of taxpayers' money, even if it is the principal shareholder in these lenders". At the time, PNB had said it was digging into records to examine the magnitude of the fraud.

Besides, several high profile loan default cases that have come to light in recent past have been found to be linked to the diamond trade, even as banks are supposed to exercise extra caution in case of loans to such sectors.

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