In a meeting organised by the Indian Banks’ Association, top executives of several lenders met on Saturday to discuss the fraud in Punjab National Bank. Held at the State Bank of India head office in Mumbai, the meeting was attended by bankers, including IBA chairman and Allahabad Bank CEO Usha Ananthasubramanian, IBA deputy CEO B Raj Kumar, ICICI Bank executive director NS Kannan and Bank of India MD & CEO Dinabandhu Mohapatra.
Sources said the meeting was held to take stock of the current situation and to help banks coordinate among themselves in recovery efforts. The fraud came to light after PNB accused diamantaire Nirav Modi of swindling Rs 11,300 crore. In an early-morning notification to the stock exchanges earlier this week, the lender said it has detected some fraudulent and unauthorised transactions at a branch in Mumbai.
As per an initial FIR filed by the CBI, a deputy general manager in the bank’s Mumbai zonal office had filed a complaint with the CBI stating that Nirav Modi, Nishal Modi, Ami Nirav Modi and Mehul Chinubhai Choksi, all partners of Diamond R US, Solar Exports and Stellar Diamonds, in conspiracy with officials of Punjab National Bank, cheated the bank.
Meanwhile, banks with exposures to scam-tainted Nirav Modi entities and associates seem to be closing ranks with Punjab National Bank to help in the recovery of funds, perhaps on a nudge by the government. Lenders who have exposure to companies promoted by Nirav Modi, including Punjab National Bank, have started recalling their loans, MD & CEO Sunil Mehta had told analysts on a call on Friday.
“On our part, we have initiated the recovery measures; called the consortium of lenders. And all banks have been advised and given information about the fraudulent practices being adopted by these group of companies and they have joined us in the process of recovery through recalling these advances,” Mehta had said.