PNB Scam: ICICI Chanda Kochhar and Axis Bank Shikha Sharma Summoned

Dean Simpson
March 7, 2018

India's biggest-ever bank fraud of 1.8 billion USA dollars is getting murkier with each passing day.

NDTV revealed that ICICI Bank drove a consortium of 31 banks that loaned cash to Mehul Choksi's Gitanjali Group.

Besides, the Reserve Bank of India imposing a penalty of Rs 3 crore on Axis Bank for violation of NPA (Non-Performing Assets) classification norms and Rs 2 crore on Indian Overseas Bank for not complying with the KYC (Know Your Customer) regulations, also proved to be a dampener.

ICICI Bank had said it neither had issued any Letter of Undertaking (LOU) nor had any buyer's credit exposure against LOUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies. The Central Bureau of Investigation had also questioned ICICI's Executive Director NS Kanan. "They have been summoned for giving the loan facility to Gitanjali Group". It then found that two junior employees had issued LOUs over the SWIFT interbank messaging system without entering any of these transactions on the bank's own system.

Both the lenders replied late in the evening, saying the SFIO action will not have any material impact on them.

According to court filings, the exposure to three companies controlled by Modi has been estimated at Rs6,498 crore ($999 million), while firms controlled by Choksi have been accused of defrauding the bank of Rs6,138 crore.

"SFIO has today sought information on the accounts of the Nirav Modi & Gitanjali groups of companies", Axis Bank said in a statement to the stock exchanges.

In a letter addressed to the heads of 31 banks, the Enforcement Directorate (ED) has directed them to meet investigating officials about the fraud, people in the know of things told Bloomberg.

Prior, a senior authority of the ICICI Bank was summoned to the CBI office in Mumbai.

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

The Rs 12,636-crore fraud was allegedly perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems.

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