A day after mega fraud detected by Punjab National Bank (PNB), the chief of the bank clarified on Thursday that Nirav Modi, who allegedly defrauded the bank of about Rs 11,500 crore, has come up with ‘some vague offers’ to repay the amount, even as the Enforcement Directorate (ED) continued raids at properties connected with the jeweller designer.
Briefing the media, PNB Chairman and Managing Director Sunil Mehta said, “Nirav Modi has not come out with any concrete plan to repay so far. But they're coming out with some vague offers, which are under examination.”
Mehta further said Nirav Modi has not come to the bank “personally” and “we have requested to him to come and give us a written plan and how he is going to make a repayment”. He said Modi had sent a formal message last week.
The CMD also said that the bank would not spare anyone involved in the crime, even as the main political parties started a blame game.
“We are known for clean banking. The fraud started in 2011. We have brought it under the notice of regulatory and law enforcement agencies as soon as we came to know about it. We will not spare anyone involved in the fraudulent practice,” said Mehta.
Billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (loU) from a branch in Mumbai to secure overseas credit from other Indian lenders.
Following the tip-off from the bank the ED on Thursday also conducted multiple searches in connection with a money laundering case against jewellery designer Modi and others.
Till date, PNB has suspended 10 officers over the scam and referred the matter to the CBI for investigations. Mehta said the bank detected the fraud and has referred the matter to the law enforcement agencies.
On questions regarding recovery of the amount, Mehta said the process has been initiated and the Enforcement Directorate has started seizing assets.
“We are trying to protect the interest of all the lenders,” he said. He said the bank was examining its whole system. “If we find any loopholes, we will plug them up,” he said, adding it was a standalone case limited to one of its branches in Mumbai.
He also said all other branches of the bank have been scanned to check any fraudulent activity. Mehta further said that the government too was examining the issue on day-to-day basis.
“The matter is under investigation. We have not received any direction from our regulator RBI in the matter but they are our regulator, whatever direction they will give we will comply,” Mehta said.
On the amount of provisioning the bank would require to make, the CMD said it was difficult to give any technical number “right now” as the matter was under investigation. He, however said the bank will honour all its bonafide commitments.
“We want to convey to all our stakeholders that PNB is pursuing clean banking agenda as a responsible bank.”
He also said forensic audits will be conducted where it has doubt that fraud has been committed and let it be unearthed. “This is the thing which is already documented so we may not require it. But if there is need be we may go for it,” he said, amid volley of questions from reporters present on the occasion.
The PNB CMD further said the bank has informed all its lenders about the case. “We have issued advisory as well to them. We were the first to inform SEBI about this under the disclosure norms. So all these things are as per our clean banking agenda,” Mehta added. In the last 123 years, he said the bank has seen many ups and down.
“The bank at its full capacity will take every action to book wrongdoers. This fraud had started in 2011. Our own bank detected first and told the law enforcement agencies about this,” he said.