Tuesday, May 21

Everything You Need to Know about the PNB Scam

The second biggest state lender of the country, Punjab National Bank had yesterday informed about the fraudulent transactions of worth Rs 11400 crore, however, it didn’t reported anything about the people involved in the scam.

Today morning around 10:12 am, it was reported that the suspected fraud has been carried out by the criminal in conspiration with 10 staff members of the bank in one of the branches in Mumbai, as written in the letter to private and public sector banks as well as foreign lenders. It also said, that the glitch was found through the Society for Worldwide Interbank Financial Telecommunication (SWIFT), that one un-authorised junior-level official fraudulently issued Letters of Undertaking (LoUs) on behalf of some companies belonging to Nirav Modi Group.

SWIFT, the global financial messaging service used to transfer millions of dollars internationally, was primarily used to bypass the core banking system (CBS) which processes daily banking transactions. It was a ploy to avoid immediate detection as the SWIFT messages used to raise overseas credit were not readily available in PNB’s FINACLE software system.

Prime Suspect – Nirav Modi


To understand in a layman’s language, a LoU is an assurance given by a bank to another as a security to meet liabilities on behalf of a customer. It is similar to a letter of credit or guarantee.

Along with Nirav Modi, the first bank officials who are reported in the matter include, retired deputy manager Gokulnath Shetty and SWO Manoj Hanumant Kharat. About 10 more employees of the national bank have also come under the scanner of the enforcement directorate.

The prime suspect Nirav Modi is the founder of Firestar Diamond and was included in the list of Forbes Billionaires of India 2013 at 63rd position. Nirav Modi also turns out to be the nephew of Mehul Choksi, the owner of Geetanjali, who was booked along with him in the first PNB bank case. His diamonds are both flaunted by Hollywood as well as Bollywood stars.


After the news splashed out, prominent jewellers like Gitanjali, Ginni, Nakshatra are also under scanner.

The Enforcement Directorate (ED) has registered a money laundering case in connection with the Rs 280-crore cheating of Punjab National Bank (PNB) allegedly by diamantine Nirav Modi and others, on the basis of a CBI FIR.

After the case, it has also been revealed that PNB had received a capital infusion from the government and the bank was to also receive over Rs 5000 crore.

As per now, Twelve properties are being searched, including Nirav Modi’s home in Mumbai’s Kurla, his jewellery boutique in Kala Ghoda, and showrooms in Chanakyapuri and Defence Colony in Delhi.

Nirav Modi is said to have left India before the case was even filed and is in Switzerland.

“Nirav Modi had left the country on January 1 much before the CBI received a complaint from Punjab National Bank on January 29 about a Rs 280-crore fraud,” said officials.

The officials further informed that the accused’s brother Nishal, a Belgian citizen, left the country on January 1, while wife Ami, a US citizen, and business partner Mehul Choksi, the Indian promoter of Gitanjali jewellery chain, departed on January 6.

Actor Priyanka Chopra, also filed a complaint against Neerav Modi for not paying her for an ad campaign. She was the brand ambassador of the Firestar Diamond.

Meanwhile, PNB speculations and case is bombarding the social platforms mainly twitter with hashtag #PNBScam. What is acting fire to the news is the presence of Modi at the DAVOS in World Economic Forum.

(Also readWorld Economic Forum 2018: Key Highlights After First Day of the Conference  )

Citizens are suggesting that such a fraud cannot be done without the help of government and is thus blaming the functioning authority for the same. They are hinting that Modi government is maybe involved in the case, some way or the other.




The prominent personalities politicians such as Sitaram Yechury and opposition parties have also got in the middle and using the opportunity to blame the Modi Government for such a irresponsible functioning.




In such exchange of news and speculations, Nirav Modi is reported to have written to the banks claiming that he would repay the loans that he has taken and is ready to pay back Rs 5000 crore, although the case filed against him is for Rs 11,360 crore fraud.

After such a huge scam, it is not clear that whether PNB is clean or is somewhat, guilty in the matter. It is further impossible to predict that did PNB file a complaint late and allow Nirav Modi leave the country, as the initial complaint against Modi was filed on January 29th , in spite of noticing the fraudulent LOU’s on January 16th.