Yet another fraud detected at PNB; same employee booked again for issuing fraudulent LoUs

By: | Updated: March 15, 2018 11:55 AM

In just one month, the Punjab National Bank (PNB) has detected yet another fraud through Letters of Understanding (LoU), according to the the complaint filed with the police.

Yet another fraud detected at PNB; same employee booked again for issuing fraudulent LoUs. (Image: Reuters)

In just one month, the Punjab National Bank (PNB) has detected yet another fraud through Letters of Understanding (LoU), ANI reported quoting a complaint filed with the police. The fraud involving Rs 9.9 crore was detected at the Mumbai branch of the bank. According to the news agency, the CBI has booked bank’s ex-DGM Gokulnath Shetty — an accused in Nirav Modi case — and Manoj Hanumat Kharawat along with promoters of Chandri Papers.

According to the complaint, Gokulnath Shetty issued two LoUs using the same modus operandi to Chandri Papers last April. On February 14, the Punjab National Bank had informed the stock exchanges about the then Rs 11,400 crore fraud involving Nirav Modi and his uncle Mehul Choksi. Currently, a multi-agency probe is underway.

On Wednesday, Reserve Bank of India governor Urjit Patel broke his silence on the Rs 12,700 Nirav Modi fraud, saying that a few “businesses are in cahoots with the lenders” causing these frauds who amount to the looting of the country.

He also said that given the limited authority to the RBI it is “infeasible for the regulator to be in all nooks & corners of banking activities.” Earlier this week, the RBI cracking the whip ended Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for trade credit.

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