Rebuffing claims by diamond merchant Nirav Modi that it stopped all options of recovery of dues by going public on the `11,394-crore fraud, PNB has asserted that it only acted in accordance with the law of the land.
Rebuffing claims by diamond merchant Nirav Modi that it stopped all options of recovery of dues by going public on the `11,394-crore fraud, PNB has asserted that it only acted in accordance with the law of the land. The bank has also asked Modi to come out with an implementable repayment plan to settle losses caused to it on letters of undertakings fraudulently issued by one of its branches to Modi’s firms. “You (Modi) 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,” a source told FE, quoting the response to Modi’s email by PNB’s general manager (international banking division) Ashwini Vats. Separately, in response to Modi’s statement on recovery of dues, PNB has told stock exchanges: “We have followed lawful avenues available to us as per law of land to recover dues.”
The bank also explained to the exchanges the vast difference between the scam size reported by it on February 5 (Rs 281 crore) and on February 14 (Rs 11,394 crore), saying its first report was based on preliminary probe, which had to be updated later on the basis of broader investigations. In a letter to PNB last week, Modi claimed: “In the anxiety to recover your dues immediately, despite my offer (on February 13, a day before the public announcement, and on 15) 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 also refers to the extended discussions between him, his representatives and the bank officers, apart from his emails on February 13 and 15.
PNB managing director Sunil Mehta said on February 15 that the bank had received some “vague offers” from Modi by email, which were rejected. Instead, the bank had asked him to come out with a detailed and clear repayment plan.
‘Enough assets to meet liability’
In its regulatory filing, the scam-hit public lender also said it has enough capital and assets to meet any liability “which is decided as per law”. Earlier, PNB suggested that other banks, too, didn’t follow RBI rules while entertaining LoUs beyond the stipulated period. “LoUs were opened in favour of overseas branches of Indian banks for import of pearls for a period of one year, for which as per RBI guidelines, the total time period allowed is 90 days from the date of shipment. This stipulation was overlooked by overseas branches of Indian banks, who are also required to follow RBI guidelines,” PNB had said in a cautionary letter to 30-odd public-sector banks on February 12. “There is clear criminal connivance of group companies of Nirav Modi and Gitanjali Gems with our branch official and also apparently with officials of overseas branches of Indian banks,” it added.