PNB writes back to Nirav Modi, says bank followed law to recover dues

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PNB writes back to Nirav Modi, says bank followed law to recover dues

PNB has written back to Nirav Modi refuting his allegations that by going public bank jeopardised recovery of dues.

Three days after businessman Nirav Modi said that the Punjab National Bank (PNB) had closed all options to recover money from his firms, the bank today sent strong rebuttal to the alleged lynchpin of Rs 11,400 crore fraud.

PNB has rubbished Nirav Modi's claim of "closing avenues" for recovery of dues. The bank said, "We followed lawful avenues available to us as per law of the land to recover our dues."

Nirav Modi had earlier wrote to the bank saying that PNB's overzealousness had shut the doors on his ability to clear the dues, which he claimed was much lower than the bank went gone public with.

Responding to the charge, PNB said, in its reply, that the quantum of amount of fraud was initially found at Rs 280 crore but later investigation revealed that it stood at Rs 11,394.02 crore (USD 1.77 billion).


1. It has been observed that the quantum of the amount of fraud was initially reported by the bank as Rs 280 crore and in a subsequent disclosure the amount was reported as approx. Rs 11000 crore. The bank is requested to clarify on the increased amount reported in sequential filings.

PNB: On 05th Feburary, 2018, we on the basis of preliminary investigation report, informed simultaneously to our Board as well as to BSE and NSE of initial fraud case of Rs 280.70 crore.

Upon receiving further investigation report enhancing the fraud amount to Rs. 11394.02 cr. (US $ 1.77 bn.) FMR with RBI, FIR with CBI were filed in evening of 13th February, 2018 and information with BSE & NSE on 14th February, 2018 around 9.00 am.

2. The bank had not reported the filing of the FIR with CBI at the occurrence of the event, but was informed in a subsequent reply in response the clarification sought by the Exchange.

PNB: Since law enforcing agencies were assigned to investigate the matter, any news in public would have alerted the fraudster affecting recovery.

3. The impact of the event on the financials and operations of the Bank.

PNB: We have enough assets/capital to meet any liability which is decided as per law.

4. Nirav Modi said PNB closed all option to recover dues by going public

PNB: We have followed lawful avenues available to us as per law of land to recover our dues.

5. CBI arrests three more Punjab National Bank men for fraud

PNB: We are awaiting written reply from Disciplinary Authority.


  • You were getting LoUs issued illegally and in an unauthorised manner.
  • You were getting unauthorized LoUs through few bank officials.
  • At no stage, such facilities were extended by our bank to the three partner firms.
  • When these illegal activities surfaced, apparent violation of FEMA and money laundering aspect were pointed out.
  • As required by law, the bank was compelled to bring these activities to the notice of Law and Enforcement agencies.
  • Your commitment and undertaking for sparing of the total liability was not backed by providing upfront amounts and timelines.
  • If you have any concrete and implementable plan, do revert back.


In his letter, Nirav Modi had said that his companies owed under Rs 5,000 crore to the bank.

"The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations, and which in turn resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns," he said.

"This thereby jeopardised our ability to discharge the dues of the group to the banks," Nirav Modi wrote in the letter.

"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," he said.

PNB, on the other hand, defended its stand of taking legal recourse saying that since law enforcing agencies were probing the matter, any news in public would have alerted the fraudster affecting recovery.

The bank also tried to dispel the impression that PNB was heading towards a major financial crisis. It said, "PNB has enough assets / capital to meet any liability decided as per law." The bank also said that it was awaiting written reply from disciplinary authority "on arrests of PNB officials for fraud."

(With inputs from Rahul Shrivastava and Munish Chandra Pandey)