Country’s largest lender SBI on Friday said it has an exposure of $212 million (about Rs 1,360 crore) in respect to letter of undertaking issued by PNB to Nirav Modi, but does not have any direct exposure to the absconding jewellery designer.
“We don’t have any direct exposure on Nirav Modi but we do have some exposure on Punjab National Bank,” State Bank of India Chairman Rajnish Kumar told reporters here on Friday. He said the bank has lent $212 million to Modi on the basis of loU issued by PNB.
Kumar, however, said the bank has some exposure to Gitanjali Gems, owned by Mehul Choksi, uncle of Nirav Modi. “Our exposure to Gitanjali is small and we are not worried,” Kumar said.
When asked about the lender's exposure to the entire gems and jewellery sector, he said it is less than 1 per cent of the total domestic loan book.
“My domestic loan book is Rs 16 lakh crore and gems and jewellery sector exposure is less than Rs 13,000 crore which is less than 1 per cent,” he said. He said the bank is very careful as far as gems and jewellery industry is concerned and has been taking steps to put lot of risk mitigation measures for accounts from the sector.
He said SBI has an elaborate system of risk management. “One of the risk management practise which we follow is job rotation. We don’t keep a person for more than three years at one position,” he said.