PNB fraud case: SFIO summons ICICI Bank Chief, Axis Bank MD

Aaron Brown
March 7, 2018

Quoting sources, media agency ANI said the SFIO had issued letters to some banks asking to explain about the working capital facility given to Gitanjali group.

SFIO has summoned consortium of 31 banks that include ICICI, Axis and PNB.

"We have no exposure to the Nirav Modi group of companies". The agency wants to join the dots connecting the irregular issue of letters of undertaking (LoU)/foreign letter of credit (FLC) by a PNBbranch in Mumbai to the companies promoted by Modi and Choksi, and figure out how they had been honoured by Indian banks' Hong Kong branches to extend working capital to them.

Axis Bank, the third largest private sector lender, does not have any direct exposure to Gitanjali, while it was among the several banks whose overseas branches had loaned money to PNB based on the fraudulent LoUs.

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In a related development, mastermind of the PNB fraud and VP of Gitanjali Group of companies Vipul Chitalia was intercepted by the immigration authority at Mumbai airport after he landed from Bangkok. Prominent among 31 banks in the Consortium which played a role in the grant of these loans were ICICI Bank and Axis Bank.

Probe into one of India's biggest banking scams over lending extended to diamantaires - Nirav Modi and his maternal uncle Mehul Choksi, is widening. As per PTI, V Srinivasan, Deputy Managing Director of Axis Bank was seen coming out of the SFIO office in Mumbai on Tuesday.

A slew of agencies, including the CBI and ministerial arms like the Enforcement Directorate as well as the SFIO are probing the scam. We have not issued any Letter of Undertaking (LOU) nor do we have any buyer's credit exposure against LOUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies... Jatin Mehta was a diamond trader from Gujarat who acquired money from Indian banks and fled the country. "The bank will submit all the required documents to the authorities", said an Axis Bank official. These amounts are then credited to the LoU issuing bank's Nostro accounts.

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