Punjab National Bank Reports $1.8 Billion Fraud At A Mumbai Branch
Punjab National Bank the second largest public sector bank in India. The bank has reportedly detected Rs.11,359 crore in fraudulent transactions in its Mumbai branch. The bank alleges that Diamond Merchant Nirov Modi, his family members and business partner Mehul Choxsy, were involved in the scam. Rajiv Kumar, banking secretary, said the PNB had suspended 10 employees as part of the scam.
The Law Enforcement Agency has been investigating the matter. Rajeev Kumar said that the investigation will help identify the unpaid dues.
More than Rs 11,359 crore worth of fraudulent transactions were found in the bank, Punjab National Bank said in its BSE filing. Some fraudulent transactions took place in a branch in Mumbai to benefit some account holders.
It also confirmed that the cash was moved to foreign accounts. PNB did not disclose any loss to the bank due to this scam. Last week, the CBI had arrested Celebrity Jewelry Nirov Modi in the cheating case, He is one of the richest men, who has connection with the same bank’s Rs.280 crore cheating case.
Punjab National Bank shares fell down on Wednesday afternoon. Analysts said that the company had a huge loss of Rs 11,359 crore in the PNB Mumbai branch. PNB started trading in the BSE with a value of Rs. 160 and fell by 8 per cent in the afternoon. At present, the bank’s value is at Rs.150. With the loss of bank shares, PNB investors lost nearly Rs 3,000 crore in a single day.
“So far there is no clarity on impact on the lender’s bottom line from this,” said Asutosh Kumar Mishra, a Mumbai-based banking analyst at Reliance Securities Ltd. “There is no clarity on whether these transactions are reversed, whether the bank is holding collateral that could back part of these transactions or whether enforcement authorities will be able to recover this amount.”