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PNB Scam

About PNB Scam

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What is PNB Scam

The Punjab National Bank scam relates to fraudulent letter of undertaking worth Rs 10,000 crore issued by the bank. 
 
The key accused in the case were jeweller and designer Nirav Modi, his maternal uncle Mehul Choksi, and other relatives and some PNB employees. Nirav Modi and his relatives escaped India in early 2018, days before the news of the scam became public. PNB scam has been dubbed as the biggest fraud in India's banking history.
 
How the 10,000-crore scam happened?
 
Bankers used fake Letters of Undertakings (LoUs) at PNB's Brady House branch in Fort, Mumbai. The LoUs were opened in favour of branches of Indian banks for import of pearls for a period of one year, for which Reserve Bank of India guidelines lay out a total time period of 90 days from the date of shipment.
 
This guideline was ignored by overseas branches of Indian banks. They failed to share any document/information with PNB, which were made available to them by the firms at the time of availing credit from them.
 
Nirav Modi got his first fraudulent guarantee from PNB on March 10, 2011 and managed to get 1,212 more such guarantees over the next 74 months. 
 
The Enforcement Directorate (ED) recovered bank token devices of the foreign dummy companies used by the fugitive diamond trader to transfer the fraudulent funds.
 
The probe agency found that Nehal Modi, brother of Nirav Modi had destroyed the devices and had even secured a server located at United Arab Emirates (UAE) soon after the scam broke out. These dummy firms had been receiving the fraudulent PNB LoUs and were based out in British Virgin Island and other tax havens.
 
The enforcement agency has so far seized movable and immovable properties to the tune of Rs 2362 crore in the PNB fraud case.
 
How was the Punjab National Bank management oblivious to this?
 
PNB employees misused the SWIFT network to transmit messages to Allahabad Bank and Axis Bank on fund requirement. While all this was done using SWIFT passwords, the transactions were never recorded in the bank’s core system — thereby keeping the PNB management in the dark for years.
 
How did the scam unfold?
 
On 29 January 2018, PNB lodged a FIR with CBI stating that fraudulent LoUs worth Rs 2.8 billion (Rs 280.7 crore) were first issued on 16 January. In the complaint, PNB had named three diamond firms, Diamonds R Us, Solar Exports and Stellar Diamonds.
 
As of 18 May 2018, the scam has ballooned to over Rs 14,000 crore. 
 
Who is Nirav Modi?
 
Nirav Modi is a luxury diamond jeweller and designer who was ranked 57 in the Forbes list of billionaires in 2017. He is also the founder of the Nirav Modi chain of diamond jewellery retail stores.
 
Modi is the Chairman of Firestar International, the parent of the Nirav Modi chain, which has stores in key markets across the globe.
 
He has 16 stores in diverse locations such as such as Delhi, Mumbai, New York, Hong Kong, London and Macau.
 
He is currently in the United Kingdom and is seeking political asylum in Britain.

Latest Updates on PNB Scam

A Mumbai court has approved the auction of Mehul Choksi's Rs 2,565.9 crore assets, seized by the ED in the PNB fraud case. The assets, including flats and factories, will now be liquidated

Updated On: 10 Dec 2024 | 6:05 PM IST

The court heard that while Modi had lost his legal fight against being extradited, there were "confidential" proceedings ongoing which had been instigated by him

Updated On: 07 May 2024 | 11:03 PM IST

The Punjab National Bank (PNB) on Wednesday moved an application before a special court here seeking restoration of the Rs 71 crore worth property owned by fugitive diamond merchant Nirav Modi

Updated On: 12 Jul 2023 | 11:39 PM IST

Parab was a deputy general manager (finance) at Firestar Diamond, a firm owned by Modi, and was deported to India from Cairo in Egypt in April 2022

Updated On: 18 Apr 2023 | 9:00 PM IST

Fugitive jeweller and designer had fled India in early 2018, days before the details of his alleged role in large-scale fraud at the Punjab National Bank became public

Updated On: 15 Dec 2022 | 11:33 PM IST

LIVE News: Catch all the updates from around the world here

Updated On: 24 Nov 2022 | 5:53 PM IST

All the proceedings against Choksi of illegal entry into Dominica were dropped on May 20, the spokesperson said.

Updated On: 22 May 2022 | 3:55 PM IST

Mehul Choksi has moved the Bombay High Court seeking that the proceedings initiated against him by ED, which has sought that he be declared a fugitive economic offender, be kept in abeyance.

Updated On: 20 Nov 2021 | 12:07 AM IST

Nirav Modi, the fugitive diamond merchant wanted in India to face charges of fraud and money laundering in the estimated USD 2-billion Punjab National Bank (PNB) scam case, has lodged his appeal against extradition from the UK and the case will be heard at the High Court in London on December 14.

Updated On: 21 Oct 2021 | 2:33 AM IST

Fugitive diamantaire Nirav Modi's brother-in-law Maiank Mehta made his first appearance before the Special Prevention of Money Laundering Act Court in Mumbai on Tuesday in a money laundering case.

Updated On: 07 Sep 2021 | 6:51 PM IST

A special court here on Friday allowed 'restoration' of properties worth Rs 500 crore of fugitive jeweler Nirav Modi 's firms to Punjab National Bank

Updated On: 27 Aug 2021 | 9:09 PM IST

A trial court here has granted bail to Dhanesh Vrajlal Sheth, the managing director of three firms accused in the multi-crore Punjab National Bank (PNB) fraud case

Updated On: 13 Jul 2021 | 4:12 PM IST

The bail granted by the Dominica Court is strictly for medical treatment in Antigua

Updated On: 12 Jul 2021 | 10:07 PM IST

Dominica Prime Minister Roosevelt Skerrit has termed "total nonsense" the claims that his government was involved in alleged abduction of diamantaire Mehul Choksi

Updated On: 02 Jul 2021 | 9:03 AM IST

The diamantaire's implication in his nephew's defrauding of PNB is well documented. Less well known is the sharp practices he employed in his Indian businesses long before this global scandal erupted

Updated On: 24 Jun 2021 | 6:10 AM IST

About 40% of the money lost by banks in the PNB scam and the fraud linked to Vijay Mallya's defunct Kingfisher Airlines has been realised by way of sale of shares seized under PMLA, the ED said

Updated On: 23 Jun 2021 | 1:29 PM IST

Prime Minister of Antigua and Barbuda Gaston Browne on Tuesday said that he was not aware of any evidence that proves fugitive diamantaire Mehul Choksi was abducted and taken to Dominica

Updated On: 23 Jun 2021 | 7:55 AM IST

Choksi was running a "circular trade" with companies propped up by him as pearl suppliers in Hong Kong, through which he had managed to siphon off over Rs 6,345 crore borrowed from PNB, CBI alleged

Updated On: 17 Jun 2021 | 3:44 AM IST

Two officials of the Punjab National Bank (PNB) -- Sagar Sawant and Sanjay Prasad -- and a director of the Gili and the Nakshtra brands under the group, Dhanesh Seth, have also been named as accused

Updated On: 16 Jun 2021 | 11:59 PM IST

Efforts by India to get back Mr Choksi will depend to a large extent on the response to the request for his repatriation from Dominica

Updated On: 16 Jun 2021 | 11:33 PM IST