The CBI today arrested Vipul Chitalia, the vice-president (banking operations) of the Gitanjali group of companies, in connection with its probe into the multi-crore Punjab National Bank (PNB) fraud, officials said
Chitalia was produced before a special court here which remanded him in CBI custody till March 17.
It is the 19th arrest in the case, a CBI spokesperson said.
Chitalia was apprehended at Mumbai airport and was brought to the Central Bureau of Investigation's office at the Bandra-Kurla Complex in the western suburbs for questioning this morning.
The investigating agency did not divulge any details about Chitalia's alleged role in the PNB fraud, though the CBI spokespeson said it wanted to find out from him how the fraudulent Letters of Undertaking (LoUs) were obtained from the bank.
The Rs 12,636-crore fraud was allegedly perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems.
It is alleged that Choksi and Modi got Letters of Undertakings and Foreign Letters of Credit (FLCs) of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
The accused officials of PNB did not enter the instructions for these LoUs in their internal software to avoid scrutiny. They were sent through an international messaging system for banking called SWIFT which is used to pass instructions among banks globally to transfer funds.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to the credit-giving bank along with accruing interest.
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