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    PNB Scam (The Nirav Modi Scam-2018)

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    The PNB scam relates to fraudulent letters of undertaking worth Rs. 10,000 crore issued by Punjab National Bank. Jeweller Nirav Modi and his uncle Mehul Choksi were the key accused in the scam. Nirav Modi had obtained fraudulent guarantees from PNB since 2011 totaling over 1,200. PNB employees misused the SWIFT system to transmit messages without recording the transactions in the bank's system, keeping management unaware of the scam for years. The scam was first reported in January 2018 for Rs. 280 crore but had ballooned to over Rs. 14,000 crore by May 2018.

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    PNB Scam (The Nirav Modi Scam-2018)

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    ARAV
    107 views2 pages
    The PNB scam relates to fraudulent letters of undertaking worth Rs. 10,000 crore issued by Punjab National Bank. Jeweller Nirav Modi and his uncle Mehul Choksi were the key accused in the scam. Nirav Modi had obtained fraudulent guarantees from PNB since 2011 totaling over 1,200. PNB employees misused the SWIFT system to transmit messages without recording the transactions in the bank's system, keeping management unaware of the scam for years. The scam was first reported in January 2018 for Rs. 280 crore but had ballooned to over Rs. 14,000 crore by May 2018.

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    PNB SCAM

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    The PNB scam relates to fraudulent letters of undertaking worth Rs. 10,000 crore issued by Punjab National Bank. Jeweller Nirav Modi and his uncle Mehul Choksi were the key accused in the scam. Nirav Modi had obtained fraudulent guarantees from PNB since 2011 totaling over 1,200. PNB employees misused the SWIFT system to transmit messages without recording the transactions in the bank's system, keeping management unaware of the scam for years. The scam was first reported in January 2018 for Rs. 280 crore but had ballooned to over Rs. 14,000 crore by May 2018.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    107 views2 pages

    PNB Scam (The Nirav Modi Scam-2018)

    Uploaded by

    ARAV
    The PNB scam relates to fraudulent letters of undertaking worth Rs. 10,000 crore issued by Punjab National Bank. Jeweller Nirav Modi and his uncle Mehul Choksi were the key accused in the scam. Nirav Modi had obtained fraudulent guarantees from PNB since 2011 totaling over 1,200. PNB employees misused the SWIFT system to transmit messages without recording the transactions in the bank's system, keeping management unaware of the scam for years. The scam was first reported in January 2018 for Rs. 280 crore but had ballooned to over Rs. 14,000 crore by May 2018.

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    PNB SCAM

    (THE NIRAV MODI SCAM-2018)

    WHAT IS PNB SCAM?

    The Punjab National Bank scam relates to fraudulent letter of undertaking worth Rs 10,000 crore issued by
    the bank.

    The key accused in the case were jeweller and designer Nirav Modi, his maternal uncle Mehul Choksi, and
    other relatives and some PNB employees. Nirav Modi and his relatives escaped India in early 2018, days
    before the news of the scam became public. PNB scam has been dubbed as the biggest fraud in India's
    banking history.

    Who is Nirav Modi?


    Nirav Modi is a luxury diamond jeweller and designer who was ranked 57 in the Forbes list of billionaires in
    2017. He is also the founder of the Nirav Modi chain of diamond jewelry retail stores.

    Modi is the Chairman of Firestar International, the parent of the Nirav Modi chain, which has stores in key
    markets across the globe.

    He has 16 stores in diverse locations such as such as Delhi, Mumbai, New York, Hong Kong, London and
    Macau.

    He is currently in the United Kingdom and is seeking political asylum in Britain.

    How the 10,000-crore scam happened?


    Bankers used fake Letters of Undertakings (Lou’s) at PNB's Brady House branch in Fort, Mumbai. The LoUs
    were opened in favor of branches of Indian banks for import of pearls for a period of one year, for which
    Reserve Bank of India guidelines lay out a total time period of 90 days from the date of shipment.

    This guideline was ignored by overseas branches of Indian banks. They failed to share any
    document/information with PNB, which were made available to them by the firms at the time of availing
    credit from them.
    Nirav Modi got his first fraudulent guarantee from PNB on March 10, 2011 and managed to get 1,212 more
    such guarantees over the next 74 months.

    The Enforcement Directorate (ED) recovered bank token devices of the foreign dummy companies used
    by the fugitive diamond trader to transfer the fraudulent funds.

    The probe agency found that Nehal Modi, brother of Nirav Modi had destroyed the devices and had even
    secured a server located at United Arab Emirates (UAE) soon after the scam broke out. These dummy firms
    had been receiving the fraudulent PNB LoUs and were based out in British Virgin Island and other tax havens.
    The enforcement agency has so far seized movable and immovable properties to the tune of Rs 2362 crore in
    the PNB fraud case.

    How was the Punjab National Bank management oblivious to this?

    PNB employees misused the SWIFT network to transmit messages to Allahabad Bank and Axis Bank on
    fund requirement. While all this was done using SWIFT passwords, the transactions were never recorded in
    the bank’s core system — thereby keeping the PNB management in the dark for years.

    How did the scam unfold?

    On 29 January 2018, PNB lodged a FIR with CBI stating that fraudulent LoUs worth Rs 2.8 billion (Rs 280.7
    crore) were first issued on 16 January. In the complaint, PNB had named three diamond firms, Diamonds R
    Us, Solar Exports and Stellar Diamonds.

    As of 18 May 2018, the scam has ballooned to over Rs 14,000 crore.

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