India's biggest bank fraud: As a scam of $1.8 billion was revealed

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On 16th February 2018, the Managing Director of Punjab National Bank (PNB), one of India’s public sector bank broke his silence (Business Standard) on the alleged ₹11,300 crores ($1.87 billion) scam by diamond merchant Nirav Modi and his maternal uncle Mehul Chuksy. The scam was started in 2011 and the fraud was detected by the bank on January 3 this year. In the press conference by Sunil Mehta, the MD of PNB also added that “We will come out of the present situation. We are in discussions with stakeholders, including other banks that are party to this development. We will resolve it and honor all bona fide commitments (New York Times) with other banks”

Nirav Modi,  a 47 years old Indian businessman, a billionaire jeweler also appeared on the Forbes billionaire list (Forbes) of 2017.  Modi is accused of money laundering case by PNB, where employees of PNB, Gokulnath Shetty and Manoj Kharat, the deputy manager and clerk of Brady House branch of the bank in Mumbai have issued  Letters of Undertaking (LoU) (The Hindu) to Modi’s companies and their banks. An LoU is a guarantee that a bank is obliged to repay the loan if the actual borrower fails to pay back the loan. The employees of the bank didn’t follow the process of securing cash reserve or collateral from Modi, and there was no record of transactions (Business Today) in bank’s core banking software, the system on which the banks’ financial transactions are run and recorded.

The leader of Communist party of India shared a photo of Nirav Modi in a tweet attending the Economic conference with Prime Minister Narendra Modi in Davos.

This scam has brought two national parties of India under the scan of media houses, as both the national parties Indian National Congress(INC) and Bharatiya Janata Party(BJP) are playing the blame game on each other.  The opposition

 

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