It may be noted that PNB has already released a cautionary note to several banks, suggesting similar modus operandi may have been used by these officials in companies belonging to Mehul Choksi -‐ Gitanjali Gems, Gili India and Nakshatra, while issuing LoUs/LCs.Īs expected, just like PNB, the share price of Gitanjali Gems also took huge hit by investors. The lender, therefore, lost, between February 14 and February 16, Rs 10.734.82 crore market valuation to Rs 30,162.18 crore compared to Rs 40,897 crore valuation before it.Īs the PNB is passing through its worst phase, the question now arises will other known jewellers be affected from this scam? Will the lenders be more cautious in this sector? On Friday, PNB was trading at Rs 124 per piece down by 3.39% on the BSE. This has failed to melt any emotion of investors who continue to beat the bank’s stock price, so much so that it has tumbled by 40% in three days. PNB is not only suffering heavy losses, but has also been betrayed by its own employees. Thus, Nirav Modi’s hideous practice resulted in over Rs 11,000 crore scam in PNB, which has already been choked with structural asset quality issues over past few fiscals. With those LoUs, lenders like Allahabad Bank and Axis Bank credited PNB’s Nostro account, from where funds were moved to certain overseas parties. In fact, PNB’s officials managed to misuse the SWIFT network to transmit messages to other banks bypassing the core banking system (CBS), keeping the bank management in dark.
What was more shocking to know that the bank’s own employees had issued unauthorised LoUs in favour of three companies owned by Nirav Modi namely Sollar Exports, Steller Diamonds and Diamond R Us for availing buyers’ credit. It was February 14, when the ongoing illegal transaction came to light against state-owned Punjab National Bank. Rs 11,000 crore Punjab National Bank (PNB) fraud, perpetuated by two known luxury jewelry brands Nirav Modi and Gitanjali Gems, has shaken banking sector of India, creating hayway in operations of other bigshot jewellers in the country.
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