(BS)
The Reserve Bank of India (RBI) had agreed in principle to a request by Punjab National Bank (PNB) to spread its losses related to the Nirav Modi-Mehul Choksi fraud over four quarters, sources said.“However, we are still awaiting a written communication from the regulator,” a source at the Delhi-based public sector bank said.PNB is staring at losses on account of fraud worth Rs 145 billion in 2017-18 after letters of undertaking worth Rs 129 billion were issued by its employees to the companies owned by Nirav Modi and Mehul Choksi.PNB had declared both accounts fraudulent after reporting the matter to investigating agencies. According to RBI guidelines, banks have to make a provision for the amount related to fraudulent accounts in their books. The fraud amount in the two cases stood at Rs 136 billion, for which provisioning would have to be made in PNB’s books in the quarter ending March.
