PNB to Nirav Modi: Come up with implementable plan to repay dues

Punjab National Bank (PNB) has asked Nirav Modi to come up with an implementable plan saying it has followed lawful avenues to recover its dues from him, the bank said in a response to his claims of the lender closing all recovery options.

“Your commitment and undertaking for sparing of the total liability was not backed by providing upfront amounts and timelines. However, should you have any concrete and implementable plan, do revert back (sic),” PNB said in a letter to its loan defaulter Nirav Modi, as per PTI reports.

This is in response to the letter written, earlier this week, by the diamond kingpin alleging that PNB’s public disclosure of “erroneous liability resulted in a media frenzy” that jeopardised his ability to discharge the dues of the group to the banks.

PNB saga: Read all the latest updates and news here.

To this, PNB has said, “We have followed lawful avenues available to us as per law of land to recover our dues.”

Separately, in a clarification to the stock exchanges on not reporting the filing of FIR with the CBI, the government-owned bank said, “Since law enforcing agencies were assigned to investigate the matter, any news in public would have alerted the fraudster affecting recovery.”

With respect to the CBI arrests of three more PNB men for fraud, the bank said it is “awaiting written reply from Disciplinary Authority”.

Meeting liabilities

Last week, PNB disclosed a Rs 11,400-crore (USD 1.77 billion) worth of fraud involving jewellers Nirav Modi and Mehul Choksi and their group firms.

The Delhi-based bank has also informed the stock exchanges that it has enough assets and capital to meet any liabilities arising from the fraud given the concerns raised on the impact of the event on the financials and operations of the PNB, as per a regulatory filing to the BSE.

PNB’s letter to Modi also says, “You were getting LoUs issued illegally and in an unauthorised way through few bank officials. At no stage such facilities were extended by our bank to your three partner firms,” PTI quoted sources citing mail response sent by PNB General Manager (international banking division) Ashwini Vats to Nirav Modi.

When the illegal activities of Nirav Modi surfaced, the bank brought them to the notice of the law enforcement agencies as they apparently violated FEMA and anti-money laundering law, it added.

According to Modi’s letter to banks, he has claimed that he owed banks less than Rs 5,000 crore and not what was publicised.

“In the anxiety to recover your dues immediately, despite my offer, your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts,” the letter added.

“This was filed to the stock exchange upon receiving an investigation report, that enhanced the fraud amount. On 05th February, 2018, we on the basis of preliminary investigation report, informed simultaneously to our Board as well as to BSE and NSE of initial fraud case of Rs 280.70 crore,” PNB informed the stock exchanges today.

The bank also sought to assuage the concerns of investors and customers about the impact of the fraud on the financials and operations of the bank.

“We have enough assets/capital to meet any liability which is decided as per the law,” the bank said in the filing.

The bank had a capital adequacy ratio of 11.58 percent as of December end. It will get an additional Rs 5,473 crore as capital from the government in the quarter ending March.

It also has huge real estate holdings that it plans to monetise and like other banks, has joint ventures in the insurance and mutual funds space which it can completely or partially exit depending on its requirements.moneycontrol