Fraud-hit Punjab National Bank (PNB) today said it has no plans to close operations at its Brady House branch, the fountainhead of the Rs 14,000 crore Nirav Modi scam.
Fraud-hit Punjab National Bank (PNB) today said it has no plans to close operations at its Brady House branch, the fountainhead of the Rs 14,000 crore Nirav Modi scam. Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs). PNB’s Brady House branch in Mumbai had fraudulently issued LoUs for the group of companies belonging to Nirav Modi since March 2011. “PNB has no plans to close operations in the Brady House branch in Mumbai. Reallocation of some of the accounts is part of the regular restructuring process at PNB to strengthen internal systems and processes and centralize certain critical functions,” a spokesperson of the bank said.
Retail operations for PNB customers continue to operate from the branch, the official said. With regards to provision made for the loss incurred on account of the Nirav Modi fraud, the bank provided Rs 7,178 crore, 50 per cent of the total amount of Rs 14,356 crore, in the fourth quarter of 2017-18.
The remaining amount will be covered in the three quarters of the current fiscal year. PNB paid Rs 6,586.11 crore to other banks to discharge its liabilities towards Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) issued fraudulently and in unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank, which was then not integrated with CBS (Core Banking Solution).