PNB MD & CEO Sunil Mehta appears before SFIO

PNB MD & CEO Sunil Mehta appears before SFIO

Thirty banks including 19 public sector, eight private sector banks, two foreign banks and one development finance institution have exposure to the largest banking fraud in India.

"Punjab National Bank's CEO Sunil Mehta was summoned by India's Serious Fraud Investigation Office in Mumbai and investigators questioned him and recorded his statement before letting him go", sources said.

It raised the amount further to almost Rs 2,600 crore last week, saying it had discovered some Rs 1,300 crore more in fraudulent letters of credit, another form of credit guarantee, issued to Choksi's Gitanjali group.

Modi and Choksi travelled overseas in January and have not returned since.

With an outstanding of over Rs 600 crore to Gitanjali, ICICI Bank is the lead bank in the consortium of 31 banks which have loaned over Rs 6,800 crore to the company. Senior executive of PNB will visit office of the investigating agency on Wednesday to record his statements.

Axis Bank revealed that it has a Rs 200-crore exposure to the scam-tainted companies promoted by Nirav Modi and his uncle Mehul Choksi.

In papers filed on Monday, the CBI also said PNB did not have all the documents related to the LoUs, since those were returned to the borrower. "The size of the fraud has now gone (up)... and the same is likely to go even higher", the CBI said in the court filing.

The Rs 11,400-crore fraud, which has been going on at PNB's Brady House branch in Mumbai, came to light on January 25, after an employee who was rolling over the letter of understanding retired and requests for rollover were not honoured by the new staff because the firms did not have such a facility sanctioned.

The New Delhi-based Punjab National Bank is the third lender which has been called by the SFIO in the last two days in connection with the Dollars 2 billion fraud, allegedly perpetrated by diamond traders Nirav Modi and Mehul Choksi.

The bank initially reported to authorities on Jan 29 that the jewellery groups had defrauded it.

Officials from ICICI Bank were also called and participated in the investigation on Tuesday, though not accompanied by a senior official.

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