PNB fraud: Nirmala Sitharaman shifts blame on Congress, says Rahul Gandhi attended Gitanjali event

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PNB fraud: Nirmala Sitharaman shifts blame on Congress, says Rahul Gandhi attended Gitanjali event

The second FIR in the Punjab National Bank fraud confirms that the scam continued till 2018.

Defence minister Nirmala Sitharaman today mounted a strong-worded attack on the UPA government over the Nirav Modi-Punjab National Bank fraud.

"Gitanjali Gems was suspended for six months for doing business on the NSE in 2013. But then LIC took a stake in that. Then in 2013, Rahul Gandhi attended a promotional event organised by Gitanjali. Soon after an additional loan was sought by. But one government-appointed officer, as media raised it, objected to it. When he kept on objecting, he was asked to resign," she said.

This comes after Union law minister Ravi Shankar Prasad in a recent press conference over the Punjab National Bank fraud case put the entire blame of the Rs 11,400 crore scam on the Congress-led UPA government.

He added that the incumbent Modi government will now not spare anyone.

Defence minister Sitharaman had earlier called the scam a "gift from the previous government".

However, the Central Bureau of Investigation (CBI) and Punjab National Bank (PNB) made it very clear, based on the documents that 143 LoUs (Letter of Understanding) were issued in 2017-2018 based on which over Rs 4,800 crores were tuned by the world class diamond traders.

Now the question arises, whether the Law Minster and Defence Minister were lying over the scam to defend their own government or are were they kept in dark?

The answer is best known to them but the facts that have come to light after the CBI lodged a second FIR against the 17 accused, confirms that the scam continued till 2018.

The CBI's FIR which is based on the complaint submitted by the Punjab National Bank says, "In all, unauthorised LoU's aggregating to approximately USD 473 million ( Rs 3032 crore) and unauthorised LC's aggregating to USD 281 Million (Rs 1854 crore) were issued in Gitanjali Group since March 1, 2017."

"143 LoU's (Letter of Undertaking) were given to Gitanjali Gems Ltd(Rs 2144 crore), Gili India Ltd(Rs 566 crore), Nakrashtra Brands Ltd(Rs 321 crore) which comes to a total of Rs 3032 crore and 224 Foreign Line Of Credit were given to Indian Banks overseas so that payments could be made to foreign suppliers," read the complaint- which is a part of the CBI's FIR.

All this happened in 2017-18.

MODUS OPERANDI OF LoU (Letter of Understanding)

According to the CBI FIR, the accused bank officials deliberately omitted entries, purportedly issued on behalf of accused companies in CBS (core banking solution) to avoid detection.


FLCs (Foreign line of Credit) were initially opened for smaller amount by creating purported entries in the core banking system and sending the relevant FLC through swift messages.

The accused bank officials unauthorisedly enhanced the values of the FLC manifolds and then issued amendments to the earlier FLCs issued through swift messages without recording it in the Core Banking Solution system, which may be the reason why the scam remained undetected.

Punjab National Bank in dock

Bank officials who are being quizzed by CBI include

1. Bechu B Tiwari, Chief Manager of PNB, Nariman Point Branch and posted there between Feb 2015-Oct 2017. He still is a Chief Manager but of a different branch.

2. Sanjay Kat Prasad, DGM Brady House Branch, Mumbai, where the scam took place. He was then AGM and posted there between May 2016 to May 2017.

3. Mohinder Kumar Sharma, current Chief Zonal manager audit office and concurrent auditor from Nov 2015 to July 2017.

4. Manoj Hanumanth Kharat, who has been named in the two FIRs. Kharat was Single Window Operator from November 2014-Dec 2017.

After filing of the second FIR, 26 places were raided by the agency. These include three companies of accused Mehul Choksy, Gilli Indian, Nakshatra Brands and Gitanjali Gems.

These three companies have 36 subsidiaries out of which 18 are in India (17 in Mumbai and one in Hyderabad) and 18 overseas. All 18 subsidiaries have been searched by the CBI.

CBI sources also said, as per guidelines of RBI, LoU's for diamond and precious stones cannot be more than 90 days. But this was allowed to be rolled over for months even by overseas branches of Indian banks.

PNB in it's complaint has mentioned this rolling over of period could have raised suspicion among officials of overseas branches of Indian Banks but it didn't.

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