Jammu & Kashmir Bank had 'no direct exposure' to Nirav Modi group companies

Jammu and Kashmir Bank on Thursday stated that they had no direct exposure to the Nirav Modi group companies but was having a business account of Gitanjali Gems in bank's Fort Business unit of Mumbai.

“Bank was not affected by any fraudulent Letters of Undertaking (LoU) issued by the Punjab National Bank. Since, 2012 the bank had sanctioned a working capital loan of Rs 121 crore under a consortium arrangement of 31 banks led by ICICI Bank to Gitanjali Gems. J & K Bank’s share in the total loan facilities of Rs 5198 crore by the consortium was 2.33%,” read the official statement J&K Bank released on Thursday.

J&K bank, statement reads, had during its clean up and consolidation drive, 18 months back, reckoned the account as a stressed account and consciously avoided additional exposure in the company.

According to the statement, in wake of recent developments of the company with PNB, the consortium recently discussed and agreed that banks may individually decide to recall the facilities and may also freeze all the accounts except for allowing few mandatory/statutory payments.

“Acting swiftly JK Bank has already initiated freeze on all debits in the account of Gitanjali Gems Limited and issued recall notice to the company which will be followed by legal action,” the spokesperson said.

Any other information regarding the matter in some sections of media, J&K Bank said was factually incorrect.

Earlier, it was reported that Nirav Modi's maternal uncle and business partner Mehul Choksi defaulted on a Rs 121-crore loan from J&K Bank, which has now risen to Rs 152 crore including interests.