Breaking his silence over the Rs 11,400-crore fraud at India's second-biggest public sector bank PNB, Prime Minister Narendra Modi today said his government will take stringent action against financial irregularities and not tolerate loot of public money.
Days after the fraud allegedly masterminded by diamantaire Nirav Modi came to light, the prime minister asked the management of financial institutions as well as the supervisory bodies to do their job diligently to check such frauds.
"I want to make it clear that this government has been taking strict action against financial irregularities and will continue to take strict action," he said at Global Business Summit. "System will not tolerate loot of public money," Modi said. (PTI)
21:24 NCLT grants MCA interim relief, allows freezing properties of 64 respondents
Moneycontrol’s Tarun Sharma has reported that the National Company Law Tribunal (NCLT) has granted interim relief to the Ministry of Corporate Affairs for freezing properties of 64 respondents in the Nirav Modi fraud case, including individual and those of his companies, as per section 222 of the Company's Act, Freezing of Securities.
Meaning, there will be freezing of selling or purchasing of securities including shares, debenture, bonds or mutual fund.
Punjab National Bank had mentioned 64 individuals in its complaint to the Ministry of Corporate Affairs (MCA). The 64 respondent are Directors of Companies, former directors, key management personnel and the Company Secretary.
The order gives MCA the permission to attach movable and immovable assets of 114 companies owned or controlled by Mehul Choksi and Nirav Modi, including personal properties of Mehul Choksi, Nirav Modi, Ami Modi and Neeshal Modi.
The next date of hearing has been set to February 27.
20:08 Government didn't act on complaints of Nirav Modi, Mehul Chowki duping common people, alleges Congress
In a fresh attack, the Congress today accused the NDA Government of complicity in not acting on complaints against PNB fraud accused Nirav Modi and Mehul Choksi filed by people who have been duped in Gujarat and elsewhere by the duo, and alleged that they were provided "protection at the highest level".
Congress spokesperson Shaktisinh Gohil alleged that Nirav Modi and Choksi have not only siphoned off crore of rupees from India's banks, but have also duped India's middle class and common people of Rs 5,000 crore or more, by floating various schemes.
He said a new "'Jan Dhan Loot Yojna has unravelled - where Gitanjali Gems promoters floated jewellery investment schemes like Shagun, 'Swarna Mangal Labh' (SML) and 'Swarna Mangal Kalash' (SMK) taking an estimated Rs 5,000 crore of public money". (PTI)
19:36 Punjab National Bank (PNB) has reiterate that it has capacity and capability to handle the situation. PNB has also denied reports that it has asked PwC to conduct a probe into alleged fraud, according to CNBC TV18.
PNB has also denied report that Indian cricketer Virat Kohli will discontinue as the brand ambassador.
The bank has also called a report that the Reserve Bank of India/ the government has asked them to pay fraudulent amount to other banks, as incorrect.
PNB has said that no restrictions on the withdrawals have been imposed by the bank and that reports on withdrawal limit of Rs 3,000 for a customer are ‘absolutely incorrect’.
19:10 Gitanjali Gems continues to lose sheen, shares plunge 60.5% in 8 days
Shares of Gitanjali Gems remained weak for the eighth straight session today and have plunged 60.5 percent, eroding its market capitalisation by Rs 450.83 crore, since the Rs 11,400 crore PNB scam came to light.
The stock declined by 4.98 percent to end at Rs 24.80 — its lowest trading permissible limit for the day today — on BSE.
On NSE, the stock slipped 4.99 percent to hit its lower price band of Rs 24.75. (PTI)
18:36 Moneycontrol’s Tarun Sharma has reported that the Ministry of Corporate Affairs (MCA) has approached National Company Law Tribunal (NCLT) to freeze and attach all movable and immovable assets of Mehul Choksi and Nirav Modi.
The government has sought attachment of 114 companies and their movable and immovable assets. The government is also looking to attach foreign assets of Mehul Choksi and Nirav Modi companies.
The government is also seeking to attach all the personal assets of Nirav Modi, Ami Modi, Nischal Modi and Mehul Choksi and has sought exparte order in this case.
17:56 Need to revisit surveillance system to plug loopholes: Former PNB chief
Admitting that failure of linkage of SWIFT to core banking system (CBS) could have led to Rs 11,400 crore fraud at Punjab National Bank, the former head of the scam-hit lender today said there was an urgent need for banks to revisit their surveillance system and plug the loopholes.
Usha Ananthasubramanian, who is now managing director and CEO of Allahabad Bank, said at her bank also SWFIT is not linked to CBS, and the process of linking both the systems is currently on.
The country's second largest PSU bank has detected USD 1.77 billion scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoU) from its Brady House branch in Mumbai to secure overseas credit from other Indian lenders. The fraud allegedly started in 2011 at PNB. (PTI)
14:50 Sources have told CNBC TV18 that any decision on PSB management rejig will be made by the government and that the Bank Board Bureau has no role to play in the PNB fraud matter.
The report has also said that the PSB management rejig would only happen after 'responsibility is fixed' by the agencies.
Banks have been given 180 days after March 1 under the new NPA framework for bad assets. PSBs will report back with a 'certificate' on LoU reconciliation. PSBs have been asked to check on their LoUs as a General Sanitisation Advisory.
12:33 Government may ask bank to pay liabilities
RBI is likely to set April 30 as the deadline for banks to link core operations and SWIFT, news agencies have reported. In addition to this, the government may also ask PNB to pay for the liabilities arising out of the fraud case. It is believed that the government will ask PNB and its peers to determine the liability of the fraud and review their foreign accounts. Allahabad Bank has sent memos to all their branches to link the bank's core operations to SWIFT.
11:34 ED hopes to recover Rs 3,000-4,000 cr by attaching properties of Nirav Modi, Mehul Choksi
The Enforcement Directorate (ED) hopes to recover Rs 3,000-4,000 crore from properties of Nirav Modi and Mehul Choksi, sources told Moneycontrol. This is in addition to the diamonds and precious stones seized by ED, valued at Rs 5,816 crore by Gitanjali Gems.
As per the assessment of income tax paid, ED believes Choksi and Modi collectively own properties worth up to Rs 4,000 crore.
The ED has sent all seized diamonds to a laboratory for assessing their value. Along with that, ED has sought a report from income tax department detailing Nirav Modi’s properties.
10:48 Finance Ministry writes to four Hong Kong banks that received LoUs from PNB.
Finance Ministry sources told ANI that they will write to SBI, Axis Bank, Allahabad Bank and Bank of India asking them to reconcile accounts and check for irregularities. The sources added that several regulatory measures are put in place - all banks are to reconcile LoUs given by them, PSU banks are to appoint special representative or agency to monitor status for all loans above Rs 250 crore, and a consortium can not exceed 7 banks.
09:12 ED has refused to accept Nirav Modi's reply and has issued fresh summons to Nirav Modi, Mehul Choksi and Ami Modi, reports CNN-News18. They were supposed to appear on February 22. However, since no one showed up, ED has told them to appear by Feb 26.
08:14 How responsible are India’s lenders? A new report has a few pointers
The Financial Planning Standards Board India (FPSB) and Indian Institute of Management (IIM), Lucknow have released the “Navigator of Responsible Lending- India” – a first of its kind report on the state of Indian consumer lending sector with respect to responsible lending practices.
Focusing on small ticket (up to Rs 15,000) personal and consumer durable loans across both banks and NBFCs, the first-of-its-kind research aims to introduce the Indian consumers especially first time borrowers to the concept of responsible lending practices, a press statement said.
Conducted from July 2017- December 2017, it evaluates the performance of industry along five selected parameters of loan application process, lender’s public information, fees & charges, loan servicing and financial inclusion on the basis of information that a consumer would be able to access in public domain, through his loan journey.
Read full story here
The Rs 11,400 crore fraud detected at Punjab National Bank (PNB) could trigger prompt corrective action (PCA) by Reserve Bank, leading to stoppage in lending by it for sometime, says a report.
The state-run lender had detected fraudulent transactions worth USD 1.77 billion (Rs 11,400 crore) at one of its branches in Mumbai.
The transactions were carried out by diamond jeweller Nirav Modi by acquiring fraudulent letters of undertaking (LoU) from the lender's Brady House branch in Mumbai to secure overseas credit from other Indian lenders.
The lender had said it would honour all 'bonafide' contracts suggesting that some of the claims may be disallowed while the other public banks are suggesting that this may not be the case.
08:05 10,000 bank customers hit by debit and credit card data breach, says report
Some 10,000 credit or debit card holders have been affected by a data breach reported by Punjab National Bank (PNB), which is already reeling under a multi-crore rupee financial fraud by two fugitive luxury jewellers, according to an Asia Times report.
The report stated that security experts believe sensitive information has been available for purchase through a website for at least three months. This comes in the time when the second largest lender is amid a major fraudulent activity.
Punjab National Bank (PNB) is witnessing probably one of the biggest scams in banking history, opening a can of worms worth over Rs 11,300 crore (USD 1,771.69 million) for the banking sector. The fraudulent transactions likely to have been going on for last seven years were unearthed by PNB at one of its Mumbai branches.
According to the report, the bank was unware of the data breach until a Singapore-registered information security company, CloudSek Information Security, tipped off on Wednesday night.
08:00 Recap of the case
What happened?
Over Rs 11,400 crore was siphoned off from Punjab National Bank (PNB) through issuance of LoUs to top jeweller Nirav Modi. Bank officials and major diamond merchant Nirav Modi and his accomplices were involved in this case. The bank officials issued the letters to the concerned persons who approached them. The fraud started in 2010, and was detected on 25 January 2018, according to PNB's MD and CEO Sunil Mehta.
What is the latest?
- Mehul Choksi did not respond of summon issued by the Enforcement Directorate on February 15, reports Moneycontrol’s Tarun Sharma.
- Moneycontrol’s Tarun Sharma has reported that Niten Shahi and Kapil Khandelwal have been sent to police custody till March 5, according to CBI. Eleven were arrested earlier, some are PNB officials and some are directly linked to Nirav Modi's firm.
- Nirav Modi has refused to appear before the Enforcement Directorate after summons were issued to him on February 15, Moneycontrol's Tarun Sharma has reported.
- ED seizes Rs 100 crore deposits, luxury cars of Nirav Modi, Mehul Choksi
- There are certain legal processes which need to be completed in time. Following advises by the agencies we did suspend the passports of Nirav Modi & Mehul Choksi. They are supposed to reply within a stipulated time, if they don't we will take further action: Raveesh Kumar, MEA (ANI tweeted)
- PNB asks Nirav Modi to come up with concrete and implementable plan to repay dues.
-Nirav Modi wrote to PNB where he said they should not have gone public with the case and that it could have been solved between the two parties.He also wrote to his employees saying that he will not be able to recover their dues.
- Supreme Court has deferred the hearing to March 16 because the Centre opposed the petition. The PIL was filed by Vineet Dhanda which seeks for deportation of Nirav Modi for three years and an investigation of the case.
- The Reserve Bank of India (RBI) will set up an expert committee to address the rising incidences of frauds and divergences in the classification of bad loans.
- On the case, Finance Minister Arun Jaitley blames the banks, the auditors and other authorities.
