NEW DELHI: The Reserve Bank might provide 4 quarters to Punjab National Bank (PNB) for making provisions in opposition to the country's biggest ever banking fraud of Rs 12,646 crore allegedly masterminded by means of billionaire diamantaire Nirav Modi.
The bank has written a letter to the banking sector regulator searching for its opinion on making provisions for the fraud, sources mentioned.
Although there is a path of the RBI on provisioning to be made in case of loan fraud, the bank is taking pre-emptive motion to take care of odd scenario created by means of unearthing of this mega fraud.
There is no precedence of fraudulent Letter of Undertaking (LoUs) issued previous, so the RBI is likely to allow PNB to make provision in opposition to the fraud now not exceeding over 4 quarters.
Last month, PNB had lodged an FIR with CBI mentioning that fraudulent LoUs worth Rs 280.7 crore had been first issued on January 16 this yr. At the time, PNB had mentioned it used to be digging into data to examine the magnitude of the fraud.
In the criticism, PNB had named 3 diamond companies -- Diamonds R Us, Solar Exports and Stellar Diamonds -- pronouncing they'd approached it on January 16 with a request for buyers' credit score for making payment to overseas suppliers. The bank sought 100 according to cent money margins for issuing LoUs for elevating buyers' credit score, which used to be contested by means of the firms pronouncing they'd availed of the power from as early as 2010.
Nirav Modi, his spouse Ami, brother Nishal and Mehul Choksi are companions in Diamonds R US, Solar Exports and Stellar Diamonds, which has stores in foreign locations reminiscent of Hong Kong, Dubai, and New York.
Among the ones named is a deputy supervisor, Gokulnath Shetty, who used to be posted at PNB's foreign currency department in Mumbai since March 31, 2010. He had allegedly along side any other legitimate Manoj Kharat fraudulently issued LoUs to those companies with out following prescribed process or making entries in the banking gadget, averting detection of transactions.
In 2015, Bank of Baroda -- any other public sector bank -- had brought to mild a scam through which two Delhi-based businessmen cheated it of Rs 6,000 crore (rather not up to $1 billion at the moment).
Investigations printed main irregularities, as the forex transactions had been accomplished basically via advance remittances for import, through newly-opened current accounts. Heavy money transactions -- now and again 4 or 5 instances an afternoon -- had been also spotted.
The Enforcement Directorate, beneath the earnings department of the finance ministry, had arrested the businessman duo beneath money laundering provisions.
Yesterday, the CBI has registered a fresh case in opposition to billionaire jeweller Nirav Modi in connection with the alleged fraud in credit score amenities prolonged by means of Punjab National Bank, causing a lack of Rs 321 crore to it.
The motion has been taken on a criticism by means of the bank on March 4, they mentioned.
The CBI has named Modi, then president (finance) of his Firestar Diamonds International Limited Vipul Ambani, leader finance officer Ravi Gupta, different administrators and officers of the corporate, and unidentified public servants of the bank, they mentioned.
This is the second CBI FIR through which Modi has been named.
The bank has written a letter to the banking sector regulator searching for its opinion on making provisions for the fraud, sources mentioned.
Although there is a path of the RBI on provisioning to be made in case of loan fraud, the bank is taking pre-emptive motion to take care of odd scenario created by means of unearthing of this mega fraud.
There is no precedence of fraudulent Letter of Undertaking (LoUs) issued previous, so the RBI is likely to allow PNB to make provision in opposition to the fraud now not exceeding over 4 quarters.
Last month, PNB had lodged an FIR with CBI mentioning that fraudulent LoUs worth Rs 280.7 crore had been first issued on January 16 this yr. At the time, PNB had mentioned it used to be digging into data to examine the magnitude of the fraud.
In the criticism, PNB had named 3 diamond companies -- Diamonds R Us, Solar Exports and Stellar Diamonds -- pronouncing they'd approached it on January 16 with a request for buyers' credit score for making payment to overseas suppliers. The bank sought 100 according to cent money margins for issuing LoUs for elevating buyers' credit score, which used to be contested by means of the firms pronouncing they'd availed of the power from as early as 2010.
Nirav Modi, his spouse Ami, brother Nishal and Mehul Choksi are companions in Diamonds R US, Solar Exports and Stellar Diamonds, which has stores in foreign locations reminiscent of Hong Kong, Dubai, and New York.
Among the ones named is a deputy supervisor, Gokulnath Shetty, who used to be posted at PNB's foreign currency department in Mumbai since March 31, 2010. He had allegedly along side any other legitimate Manoj Kharat fraudulently issued LoUs to those companies with out following prescribed process or making entries in the banking gadget, averting detection of transactions.
In 2015, Bank of Baroda -- any other public sector bank -- had brought to mild a scam through which two Delhi-based businessmen cheated it of Rs 6,000 crore (rather not up to $1 billion at the moment).
Investigations printed main irregularities, as the forex transactions had been accomplished basically via advance remittances for import, through newly-opened current accounts. Heavy money transactions -- now and again 4 or 5 instances an afternoon -- had been also spotted.
The Enforcement Directorate, beneath the earnings department of the finance ministry, had arrested the businessman duo beneath money laundering provisions.
Yesterday, the CBI has registered a fresh case in opposition to billionaire jeweller Nirav Modi in connection with the alleged fraud in credit score amenities prolonged by means of Punjab National Bank, causing a lack of Rs 321 crore to it.
The motion has been taken on a criticism by means of the bank on March 4, they mentioned.
The CBI has named Modi, then president (finance) of his Firestar Diamonds International Limited Vipul Ambani, leader finance officer Ravi Gupta, different administrators and officers of the corporate, and unidentified public servants of the bank, they mentioned.
This is the second CBI FIR through which Modi has been named.
RBI may give PNB one year to provision against multi-crore fraud
![RBI may give PNB one year to provision against multi-crore fraud]()
Reviewed by Kailash
on
March 09, 2018
Rating:
