Mumbai: Punjab National Bank (PNB) officials had met representatives of Nirav Modi and Gitanjali groups to impress upon them to pay outstanding amounts, the bank said in a clarification to the stock exchanges.
"A series of meetings were held with representatives of Nirav Modi group and Gitanjali group at Delhi & Mumbai to impress upon them to pay the amount. They were also directed to provide all necessary documents as per law to ensure that the imports are bonafide trade transactions," the PNB statement said in the clarification dated February 15 to the exchanges accessed on Saturday.
Giving details of the fraud on the bank, the statement said that "on January 16, 2018, the partnership firm of Nirav Modi group approached our branch at Brady House, Mumbai and presented a set of import documents with a request to allow buyers' credit for making payment to the overseas suppliers."
"Since there was no sanctioned limit in the name of the above firms, the branch officials requested the firms to furnish at least 100 percent cash margin for issuing Letter of Undertaking (LOU) for raising buyer's credit. The firms contested that they have been availing such transactions since past several years," it said. On scrutiny, the bank found that fraudulent LoUs had been issued favouring the two groups.
On February 14, PNB informed the stock exchanges that a $1.8 billion fraud had happened in one of its Mumbai branches.
The Central Bureau of Investigation (CBI) and the Enforcement Directorate started investigating. The CBI has since arrested PNB's retired Deputy Manager, Gokulnath Shetty and its Single Window Operator Manoj Hemant Karat. One authorised signatory of the Nirav Modi group was also arrested. The three were remanded to police custody till March 3 by a CBI court on Saturday.
The clarification by PNB also states: "Foreign bank branches namely Allahabad Bank, Hong Kong, Axis Bank, Hong Kong and other banks were requested to provide all communication with borrower and documents if any held in their record to understand bonafide of the transactions."
The main accused in the case Nirav Modi, his wife Ami, brother Nishal Modi and maternal uncle Mehul Choksi left the country in January. The CBI is sending notices asking them to present themselves for further investigation. Meanwhile, the PNB said it would be holding an extraordinary general meeting on March 16, 2018.
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