PNB fraud: CBI arrests three people over Rs11,400 crore banking fraud

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Mumbai: The Central Bureau of Investigation (CBI) on Saturday morning arrested three accused in the Rs11,400 crore bank fraud at public sector lender Punjab National Bank (PNB). The arrested include Gokulnath Shetty, retired deputy manager of PNB, Manoj Kharat, another PNB employee and Hemant Bhat, authorised signatory of the Nirav Modi group of firms, according to an official with the investigation agency who didn’t wish to be named.

The three would be produced before the CBI special court in Mumbai on Saturday.

The bank officials are alleged to have issued fake Letter of Undertaking (LoUs) to overseas branches of Indian banks based on which the overseas bank branches released funds to the suppliers of Nirav Modi firms and his associate Mehul Choksi of Gitanjali Gems Ltd.

The arrest comes after the federal investigator registered a second case against two PNB officials and others of the Gitanjali Gems group in relation to the fraud. On 31 January, CBI had filed a case against these PNB official and billionaire diamond merchant, Nirav Modi, his wife Ami, brother Nishal and Mehuk Choksi.

The CBI FIR alleged that Shetty and Karat in connivance with accused companies defrauded PNB to the tune of Rs4,886.72 crore.

“The fraud was done in matter of issuance of unauthorised and fraudulent Letters of Undertaking in favour of foreign branches of Indian based banks and purported Foreign Letters of Credits in favour of foreign suppliers of accused companies,” it added.

On Friday, eight other PNB employees were suspended. The number of suspended employees now stands at 18, which also includes general manager level officers. Internal investigation of the bank is still underway.livemint