PNB exposure to alleged fraud swells to well above $2 bn

PNB exposure to alleged fraud swells to well above $2 bn

Punjab National Bank (PNB) has told police it has uncovered additional exposure of about 9.42 billion rupees in connection with a huge alleged fraud, according to a court filing seen by Reuters. In what has been dubbed the biggest fraud in Indias banking history, PNB, the countrys second-biggest state-run lender, said last month it had been defrauded of about $2 billion. The bank accused two jewellery groups- one controlled by diamond tycoon Nirav Modi and the other by his uncle, Mehul Choksi- of colluding with rogue bank employees to secure credit from overseas lenders using fraudulent guarantees.

Both men deny any wrongdoing. Police say they left India in January before the initial complaint was filed, and their whereabouts are unknown. In a court filing on Tuesday police said that including a new complaint filed by the bank, the total amount Choksis Gitanjali group of companies allegedly defrauded PNB of has reached 70.8 billion rupees. A lawyer for Gitanjali groups head, Mehul Choksi, said he was unaware of the new allegations and declined to comment.

Law enforcement agencies had previously attributed 61.38 billion rupees of the alleged fraud amount to Gitanjali, and nearly 65 billion rupees to companies controlled by Modi. PNB has also alleged Niravs companies cheated it by a further 3.22 billion rupees, which it said was not used for the purposes for which the loans we...

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