PNB suspends 10 in a fraud involving top Mumbai jewellery designer

PNB suspends 10 in a fraud involving top Mumbai jewellery designer

On the BSE on Wednesday, PNB's shares closed at Rs 145.80, down from Rs 161.65, the closing price on Tuesday. Its market cap on closing on Thursday stood at Rs 35,365 crore.

State-owned Punjab National Bank said in a Wednesday statement that the "fraudulent and unauthorized transactions" had been discovered in January in a single Mumbai bank branch "for the benefit of a few select account holders with their apparent connivance". He said the transactions were detected in only one branch and no other branches were involved. Moreover, the provision for bad loans is at higher levels, as it increased 80 percent quarter-on-quarter and 74 percent year-on-year to Rs 4,466.7 crore in the third quarter.

The bank elaborated that in the normal course of business, it undertakes, through its overseas branches, transactions against LoUs issued by other banks.

Regarding the Mallya comparison made by Congress President Rahul Gandhi, Prasad said that the government has cracked down on the liquor baron and similarly in the PNB fraud case too, the government will act tough.

The bank has informed about the fraudulent transactions to the law enforcement investigating agencies for the further investigations on fraud transactions. "Based on these transactions, other banks appear to have advanced money to these customers overseas", PNB said in a notice sent to the stock exchanges on February 14.The matter has been referred to law enforcement agencies.

Addressing the jeweller as "Chhota Modi" in a press conference here, Surjewala said that Nirav was part of a delegation travelling with the prime minister despite "the complaint against him."He further asked the Prime Minister Modi to take actions, adding that "otherwise Chote Modi will run away".

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This is the second case in less than 10 days against the diamond merchant.

A diamond necklace designed by Modi fetched Rs 13 crore at a Christie's auction in Hong Kong in 2015.

In its original complaint, PNB had claimed that its officials had fraudulently issued a total of eight letters of undertaking (LoUs) worth $44.2 million (Rs 280 crore) without following the prescribed procedure and failed to make entries in the banking system to avoid detection. A copy of the FIR is available on CBI's website. "The facts disclose commission of cognizable offences of criminal conspiracy, cheating and abuse of official position by the aforesaid accused persons", the FIR states.

The grievance likewise specified his better half Ami Modi, his sibling Nishal Modi and his uncle Mehul Choksi, MD of Gitanjali Gems - a recorded organization.

The PNB chief said the finance ministry was taking stock of the matter on a day-to-day basis and would "come down heavily in support of booking the culprits".

The LoUs were issued on behalf of Diamond R US, Solar Exports, Stellar Diamonds.

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