ICICI Bank Chief Chanda Kocchar and Axis Bank Managing Director Shikha Sharma were summoned for interrogation today by Serious Fraud Investigation Office, Mumbai, in the Punjab National Bank scam case.
ICICI, part of the 31-bank consortium that lent money to the Gitanjali Group, had sanctioned a loan of Rs 405 crore. The agency wants to join the dots connecting the irregular issue of letters of undertaking (LoU)/foreign letter of credit (FLC) by a PNBbranch in Mumbai to the companies promoted by Modi and Choksi, and figure out how they had been honoured by Indian banks' Hong Kong branches to extend working capital to them.
SFIO has summoned consortium of 31 banks that include ICICI, Axis and PNB.
Investigators are seeking to probe the chiefs of India's biggest lenders as they widen their investigation into the Rs13,600cr fraud at Punjab National Bank (PNB), a Bloomberg report has revealed. Nirav Modi firms Stellar Diamond and Solar Exports and Diamonds have together borrowed close to Rs 4,000 crore from banks. We have not issued any Letter of Undertaking (LOU) nor do we have any purchaser's acknowledge introduction against LOUs for regard to the Nirav Modi gathering of organizations and in addition the Gitanjali gathering of companies... He has been taken for questioning at the Bandra-Kurla Complex, an official said.
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Mumbai: The extent of the unravelling fraud at India's state-run Punjab National Bank (PNB) could rise beyond the almost $2 billion mark so far outlined by the lender, according to a source involved in the probe and court documents reviewed by Reuters.
"In the normal course of trade business, the bank, through the overseas branches, undertakes transactions against LoUs (Letters of Undertaking) issued by other banks". The Bombay stock exchange has sought clarifications on this issue from 2 banks.
With Axis Bank and ICICI Bank complying with the SFIO summons, other lenders are likely to follow the suit. The fraud investigative agency has recorded the statements of Axis bank representative in the case.
The accused officials of PNB did not enter the instructions for these LoUs in their internal software to avoid scrutiny.