(LiveMint)
The extent of the unravelling fraud at India’s state-run Punjab National Bank (PNB) could rise beyond the nearly $2 billion mark so far outlined by the lender, according to a source involved in the probe and court documents reviewed . The source, who asked not to be named, said investigators had not yet recovered all the papers and loan guarantees allegedly issued by rogue employees of the bank, and consequently believed the bank’s exposure could be greater than revealed so far.
In what has been dubbed as the biggest fraud in India’s banking history, Punjab National (PNB) and police have accused two jewellery groups—one controlled by diamond tycoon Nirav Modi and the other by his uncle Mehul Choksi—of colluding with bank employees to get credit from overseas banks using fraudulent guarantees. Both Choksi and Modi have denied the allegations and lawyers for the two key accused PNB employees in the case have also said they are innocent.
According to court filings, the exposure to three companies controlled by Modi has been estimated at Rs6,498 crore ($999 million), while firms controlled by Choksi have been accused of defrauding the bank of Rs6,138 crore.
