By Anirudh Saligrama
The $1.8-billion fraud at Punjab National Bank Ltd. has left lenders worried about who will make good on the money lent on allegedly fraudulent guarantees that billionaire jeweller Nirav Modi and related firms had obtained.
The country’s second largest public sector bank disclosed that its staff issued fraudulent ‘Letters of Undertaking’ based on which Modi and his firms got short-term buyer’s credit worth more than Rs 11,000 crore. The loans were given by branches of a host of Indian banks.
The country’s largest lender, State Bank of India, said it has an exposure of about Rs 1,360 crore but does not have any direct exposure to the absconding jewellery designer, according to a PTI report. Quoting SBI Chairman Rajnish Kumar, the newswire reported that the bank has some exposure to Gitanjali Gems Ltd., owned by Mehul Choksi, Modi’s uncle, but it was negligible.
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius