PNB fraud updates: RBI stops use of Letters of Undertakings for trade credit finance

Punjab National Bank, the second-biggest state-run lender, took the financial sector of the country by surprise when it announced earlier this week it had detected fraudulent transactions worth Rs 11,400 crore at a single branch in Mumbai. The key faces of one of the biggest financial fraud is diamond baron Nirav Modi and his business partner Mehul Choksi. 

Here are the developments so far:  

• RBI on Tuesday, 13 March 2018 banned banks from issuing Letters of Undertaking (LoUs) -- instruments used allegedly by diamantaire Nirav Modi and his uncle Mehul Choksi to defraud state-owned PNB of Rs nearly 13,000 crores in connivance of bank officials.

• The CBI on Tuesday told a Mumbai court that it has added the charge of 'criminal breach of trust' to the case related to diamond trader Mehul Choksi's firms in the Punjab National Bank (PNB) fraud case. It also said that the fraud related to Choksi-controlled firms is now found to be to the tune of Rs 7,080 crore.

• The Punjab National Bank on Tuesday, 13 March 2018, told police that it has uncovered additional exposure of about 9.42 billion rupees ($145.2 million) in connection with a massive alleged fraud, according to a court filing seen by Reuters.

• The CBI on Thursday, 08 March, 2018, said that it has registered a fresh case against diamantaire Nirav Modi for causing a loss of Rs 321 crore to Punjab National Bank (PNB) by availing different credit facilities between 2013 and 2017.

• ICICI Bank chief Chanda Kochhar and Axis Bank's Shikha Sharma have been summoned by an anti-fraud agency in the fraud. 

• The CBI today detained Vipul Chitalia, the vice president of Gitanjali Group of Companies, as a part of its probe into the multi-crore Punjab National Bank (PNB) fraud, an official said.

• After being on the back foot in the aftermath of the Rs 12,700 crore Punjab National Bank (PNB) scam, the ruling Bharatiya Janata Party (BJP) on Monday tore into the Opposition camp saying it’s the actions of the previous United Progressive Alliance government that worsened the bad loan situation.

• Officers' union of public sector banks AIBOC has opposed the decision to close overseas branches in the light of Rs 12,700 crore fraud.

• The National Company Law Tribunal (NCLT) has restrained over 60 companies, including those belonging to Rs 12,600-crore PNB fraud accused Nirav Modi and his uncle Mehul Choksi, from selling their assets, according to a government announcement on Sunday.

• The CBI on Thursday said a retired bank Chief Manager has been arrested in the Rs 12,600 crore bank fraud involving jeweller Nirav Modi and his uncle Mehul Choksi.

• A Mumbai court on Friday sent Punjab National Bank's (PNB), Internal Chief Auditor (retired) Bishnubrata Mishra to the Central Bureau of Investigation (CBI) remand till March 14.

• The Punjab National Bank (PNB) is not shown as a creditor in the bankruptcy documents filed in a court here by three companies affiliated with Nirav Modi.

• A US court today passed an interim order that prevents creditors from collecting debt from Nirav Modi-owned Firestar Diamond Inc. after it filed for bankruptcy.

• The United States government is aware of media reports that diamond jeweller Nirav Modi is in the country but is unable to confirm them, a State Department official said today.

• The Enforcement Directorate (ED) today said it has attached 41 properties of Gitanjali Gems and its promoter Mehul Choksi, valued at over Rs 1,200 crore, in connection with its money laundering probe in the PNB scam.

• Potential buyers have expressed strong early interest in a bankrupt U.S. firm of jeweller Nirav Modi.

• The CBI on Wednesday arrested an Internal Chief Auditor of Punjab National Bank (PNB), in connection with the Rs 12,636-crore loan scam involving the bank.

• A Blue Corner notice was issued on Wednesday against Nirav Modi and his uncle Mehul Choksi of Gitanjali Group.

• Firestar Diamond Inc, the flagship company of billionaire Nirav Modi, has filed for bankruptcy in the United States.

• The Finance Ministry sent a missive to state-run lenders to examine all bad loans above Rs 50 crore for possible fraud.

• PNB has reported fresh scam of Rs. 1251 crore by Gitanjali Gems, said Central Bureau of Investigation (CBI) on Tuesday.

• The government on Tuesday set a deadline of 15 days for public sector banks (PSBs) to examine all non-performing assets above Rs 50 crore for possible fraud and to identify operational and technical gaps.

• The CBI has sought from the Chief Vigilance Officers of five banks the details of financial transactions in the Nostro accounts of Punjab National Bank.

• Foreign investors have pulled out nearly Rs 10,000 crore (USD 1.5 billion) from the Indian stock market so far this month primarily due to PNB fraud jitters coupled with global cues.

• The CBI on Saturday questioned Punjab National Bank (PNB) Managing Director-cum-Chief Executive Officer Sunil Mehta and Executive Director K V Brahmaji Rao in connection with the multi-crore scam.

• The Enforcement Directorate (ED) today attached 21 properties, including a penthouse and a farmhouse, of Nirav Modi and his group.

• Owner of Gitanjali Gems, Mehul Choksi, expressed his "helplessness" in a letter to his employees, stating that he would be unable to clear their dues in lieu of the ongoing probe.

• Scam-hit Punjab National Bank (PNB) on Friday said cricketer Virat Kohli continues to be its brand ambassador and denied reports that it has engaged audit firm PricewaterhouseCoopers (PwC) to investigate the Rs 11,400 crore fraud.

• Priyanka Chopra, who featured in one of the advertisement campaigns for Nirav Modi, has terminated her contract with the brand in light of allegations of fraud against billionaire jewellery designer.

• Responding to Nirav Modi’s allegations of Punjab National Bank (PNB) going public to close all avenues to recover dues, the bank strongly refuted the claims and assured following “lawful avenues".

• The Enforcement Directorate today said it has frozen mutual funds and shares worth Rs 94.52 crore of the Nirav Modi and Mehul Choksi groups.

• Punjab National Bank has stepped up its controls on the use of global payments network SWIFT following the multi-crore fraud.

• The Finance Ministry will soon call a meeting of top officials of scam-hit Punjab National Bank and other lenders to amicably resolve the issues concerning payment liabilities of Rs 11,400 crore arising from the alleged fraud.

• CBI has arrested Rajesh Jindal, a senior PNB official, as the inquiry expands a week after it unveiled the size of the alleged scam.

• The CBI on Tuesday arrested three senior executives of diamantaire Nirav Modi’s group and two of Gitanjali group promoted by Mehul Choksi in connection with two separate cases related to the multi-crore fraud.

• After remaining silent for almost a week over the scam, Finance Minister Arun Jaitley on Tuesday broke his silence but only to train his guns on auditors for their failure to detect the fraud on time.

• CBI told a special court in Mumbai that the key accused Gokulnath Shetty, then deputy manager (now retired) of PNB, had told them that issuing of the Letter of Undertakings (LoUs) had been going on since 2008.

• In the latest development, Nirav Modi has now denied fraud allegations levelled against him by Punjab National Bank (PNB), his lawyer said on Tuesday.

• Rating agency Moody's today placed the PNB under review for downgrade, after the multi-crore scam.

• The Supreme Court today agreed to hear a Public interest litigation (PIL) seeking immediate deportation of Nirav Modi on February 23. Chief Justice of India (CJI) Dipak Misra-led bench will hear the PIL filed by lawyer Vineet Dhanda.

• Nirav Modi has reportedly shot off a letter to the Punjab National Bank accusing it of jumping the gun by going public with the unpaid debt of his companies. “This thereby jeopardised our ability to discharge the dues of the group to the banks,” news agency PTI reported quoting him as saying. 

• According to an income tax report, Nirav Modi received almost Rs 555 crore from two firms abroad between March 2013 and April 2014.

• A father has said that Punjab National Bank (PNB) has framed his son in the Nirav Modi fraud case of over Rs 11000 crore.

• AS the plot behind the PNB scam thickens, the government is considering dissolving the Banks Board Bureau (BBB) headed by Vinod Rai who is set to retire in March.

• Two senior officials of Gitanjali Gems, Chandrakant Karkare and Pankhuri Warange, resigned from the company, according to a regulatory filing with the stock exchanges on Monday. The names of the two officials were mentioned in the FIR filed by the Central Bureau of Investigation on the fraud. 

• Punjab National Bank need to honour the "bonafide" transactions that have occurred through the bank's platform, a finance ministry official said on Monday.

• Advocate Vijay Aggarwal, who defended a number of ‘high-profile’ accused persons in the 2G spectrum case, is set to represent accused jeweller Nirav Modi in connection with Punjab National Bank fraud case.

• The Central Vigilance Commission on Monday issued an advisory to all the public sector banks ordering them to transfer the officers who have completed three years as on December 31, 2017.

• The CBI is also questioning Vipul Ambani, the Chief Financial Officer of diamantaire Nirav Modi's Fire Star diamond company.

• The CBI on Monday sealed the Brady House Branch of the Punjab National Bank as the probe agencies continued with their investigation into the multiple crore fraud, according to officials.

• The Enforcement Directorate (ED) on Sunday conducted searches at over 45 more locations in 15 cities across India in connection with the multi-crore scam, an official said.

• At least 200 shell firms and "benami" assets have come under the scanner of the investigative agencies that are probing the above Rs 11,400-crore alleged fraud.

• As investigations gather momentum, officials at overseas branches of other banks, where the fraudulently issued Letter of Undertakings (LoUs) were encashed, are under scanner, sources said.

• Rating agency Crisil has put the Punjab National Bank's ratings on 'watch', following the fraud detected by the lender at one of its Mumbai branches.

• A special court in Mumbai Saturday remanded three persons arrested in the Punjab National Bank (PNB) scam in a 14-day custody of the Central Bureau of Investigation (CBI), saying the scam has "consequences for the economy of the nation".

• Indian banks could take a hit of more than USD 3 billion from loans and corporate guarantees provided to diamond companies at the centre of a massive alleged fraud at the state-run Punjab National Bank, the tax department has estimated.

• State-owned UCO Bank Saturday said it has exposure of USD 411.82 million (about Rs 2,636 crore) in the Rs 11,400-crore PNB fraud committed by billionaire jeweller Nirav Modi and his associates.

• Congress President Rahul Gandhi on Friday launched a scathing attack on Prime Minister Narendra Modi on the PNB scam allegedly involving Nirav Modi, asking him to explain why it happened and what was he doing about it.

• The CBI on Sunday arrested three people -- a retired and a serving officials of Punjab National Bank and an executive of Nirav Modi's company -- in connection with the alleged Rs 11,400-crore fraud, and carried out searches at the Brady Road branch of the bank in Mumbai.

• The Enforcement Directorate on Saturday said that the solitary Gitanjali Gems store in Kolkata has started winding up since the Rs 11,400-crore Punjab National Bank scam broke out.

• The Central Bureau of Investigation (CBI) on Saturday has arrested Punjab National Bank's retired Deputy Manager, Gokulnath Shetty and two others in a multi-crore bank fraud case, officials said.

• With Friday's action by Enforcement Directorate, the total seizure of diamonds, gold and jewellery has gone up to Rs 5,649 crore. The ED has summoned diamantaire Nirav Modi and his business partner and jewellery chain promoter Mehul Choksi in connection with its money laundering probe in the Rs 11,400-crore alleged fraud at Punjab National Bank

• Regulators RBI and Sebi today stepped up probe into the massive Rs 11,400-crore fraud at PNB as law enforcement agencies intensified their hunt for billionaire diamantaire Nirav Modi and his associate Mehul Choksi. The Reserve Bank warned of "appropriate supervisory action", saying it is assessing the control systems at Punjab National Bank (PNB).

• In further trouble for beleaguered jewellery designer Nirav Modi, the Income Tax Department today provisionally attached 29 properties and 105 bank accounts of the diamond merchant, his family and firms as part of its tax evasion probe

• The Congress on Friday continued its belligerent attack on Prime Minister Narendra Modi and claimed that the PNB fraud of over Rs 11,000 crore was India's biggest "bank loot scam" and has got bigger to touch Rs 21,306 crore. The BJP, hitting back, dubbed the PNB fraud a "UPA scam", claiming that a state-run bank was pressured to sanction loan to tainted businessman Nirav Modi in 2013 a day after Rahul Gandhi visited his jewellery exhibition.

• Davos photo featuring Nirav Modi- The government on Friday sought to distance itself from a controversial group photograph featuring absconding businessman Nirav Modi along with Prime Minister Narendra Modi and some Indian CEOs at the World Economic Forum in Davos, Switzerland, last month.

• A senior government official said that PNB has suspended eight more officials, including one at general manager level, for their suspected involvement in the multi-crore scam. The bank had suspended 10 employees dor their alleged involvement in the scam earlier on Wednesday.

• PNB will settle liabilities towards other banks by March end and no further capital infusion would be needed as these would be funded from internal resources, an official confirmed.

          How could government let  Nirav Modi, Mehul Choksi to leave India, asks Congress

• Nirav Modi and Mehul Choksi have been asked to respond within one week as to why their passports should not be impounded or revoked. If they fail to respond within the stipulated time, MEA will go ahead with the revocation.

• On the advice of the Enforcement Directorate, the Passport issuing authority in the Ministry of External Affairs has suspended validity of passports of Nirav Modi and Mehul Choksi with immediate effect for a period of four weeks.

• Fresh CBI FIR involves 143 LoUs and 224 foreign letters of credit, which are separate from the earlier 150 LoUs relating to the FIR dated 31 January 2018.
  
  READ: CBI raids on Nirav Modi yield 95 documents

• In this case the alleged loss to PNB is estimated at Rs.4886.72 crores. Three companies of Mehul Choksi have been named in the CBI FIR- Gitanjali Gems, Gili India and Nakshatra Brand Ltd.

• CBI has reached former PNB Deputy Manager Gokulnath Shetty's residence in Malad who has has been untraceable since few days.

• The searches are going on in Maharashtra's Mumbai and Pune, Gujarat's Surat, Rajasthan's Jaipur, Telangana's Hyderabad and Tamil Nadu's Coimbatore in connection with Mehul Choksi's Gitanjali Group and other directors of accused companies. 
  
  Explainer: How PNB fell victim to India's biggest bank fraud

• CBI earlier in the day conducted searches at 20 premises in 6 cities across 5 states, belonging to Mehul Choksi's Gitanjali Group & other directors of accused companies.

• Sources in finance ministry said, "Recapitalisation of PNB will not be impacted by fraud case, the bank will get its recapitalisation share of Rs 5000 crore, as allocated earlier."

• Eight employees of Punjab National Bank suspended, the number of suspended employees now stands at 18, which also includes General Manager level officers. Internal investigation of the bank is still underway. 
  
  READ: Meet Nirav Modi: The celebrity jewellery designer accused of money-laundering

• Interpol's diffusion Notice issued against Nirav Modi, his wife Ami Modi, brother Nishal Modi and Mehul Choksi.

• In Mumbai, after almost 24 hours, raids continued at Nirav Modi's boutique in Kala Ghoda. 

• Nirav Modi is currently staying in a suite at JW Marriott's Essex House in New York, NDTV had reported earlier today. 
  
  WATCH: ED conducts raids on Nirav Modi showrooms

• PNB Chairman and Managing Director Sunil Mehta today said that the bank has the capability to recover the dues from Modi and promised to take action against all wrongdoers.

• The Enforcement Directorate on Thursday had conducted searches at his properties in Mumbai, Delhi and Gujarat, and seized assets worth Rs 5,100 crore.