 "Punjab National Bank, PNB")
The finance ministry on Tuesday said it apprised the Prime Minister's Office (PMO) on March 1 of the action taken with regard to fraudulent issuances of Letters of Undertaking (LoUs) of Punjab National Bank leading to a fraud of Rs 126.46 billion.
In written replies to a host of questions regarding the alleged fraud by jewellery designer Nirav Modi and his uncle Mehul Choksi, the ministry informed the Rajya Sabha that the Central Bureau of Investigation (CBI) has registered two cases in the matter and so far has arrested 18 persons.
With regard to a specific question on the loss of market capitalisation of the PNB, Finance Minister Arun Jaitley said the state-owned lender has "sound fundamentals" and strong growth potential.
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As far as the action taken in the fraud case is concerned, the ministry in another reply said: "Department of Financial Services ... vide Office Memorandum dated March 1, 2018 apprised PMO of action taken regarding the fraudulent issuance of LoUs in PNB".
It was further informed that on the basis of FIRs registered by the CBI, the enforcement directorate filed two cases under the provisions of the Prevention of Money Laundering Act and conducted searches at various locations and seized moveable properties and attached immovable properties.
"Further, mutual funds and bank accounts have been frozen. Letter of Request to 13 countries have been issued by the court seeking details of properties, bank account of companies, etc. ED has also moved the court for obtaining non-bailable warrants against the accused persons," the ministry said.
The Rajya Sabha was also informed the RBI has apprised the ministry that the PNB fraud aggregated to Rs 12,6.45 billion.
Of the total, Rs 64.98 billion related to the accounts of Nirav Modi Group.
In a separate written reply, the ministry said that unauthorised LoUs were being issued since March 10, 2011, and "the matter was detected when the bank was approached on January 16, 2018, with the request to allow buyers credit for making payment to overseas suppliers".
