ICICI Bank's Chanda Kochhar, Axis Bank's Sikha Sharma summoned by anti-Fraud Agency

Kashmir Times. Dated: 3/7/2018 3:01:27 PM

NEW DELHI, Mar 6 (Agencies): The anti-fraud agency (SFIO) on Monday summoned ICICI Bank chief Chanda Kochhar and Axis Bank's managing director Shikha Sharma in the Punjab National Bank (PNB) fraud case.
NDTV reported that ICICI Bank led a consortium of 31 banks that lent money to Mehul Choksi's Gitanjali Group. Sources indicate the senior officials are only being questioned for clarifications and not as accused in the fraud case.
ICICI Bank had earlier claimed it did not have any exposure to Nirav Modi group of companies but the bank was only lending working capital to the group along with several other banks.
"We have no exposure to the Nirav Modi group of companies. We have not issued any Letter of Undertaking (LOU) nor do we have any buyer’s credit exposure against LOUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies...We are working capital lenders to the Gitanjali group of companies along with several other banks in the consortium...Our exposure to the Gitanjali group of companies is not the largest among lenders in the consortium," the bank had said, adding that it was "fully co-operating with the investigating agencies in their efforts".
Earlier, a senior official of the ICICI Bank was summoned to the CBI office in Mumbai. NS Kannan, executive director ICICI bank, was the leader of consortium of the bank that lent money to Gitanjali Group, it has been alleged.
This comes amid reports that the Central Bureau of Investigation (CBI) on Monday detained Vipul Chitalia, vice president (banking operations), Gitanjali Group, at Mumbai airport in the Punjab National Bank fraud case. He has been taken for questioning at the Bandra-Kurla Complex, an official said. He did not divulge any other details about Chitalia's alleged role in the PNB fraud.
The Rs 12,636-crore fraud was allegedly perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems. It is alleged that Choksi and Modi got Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
The accused officials of PNB did not enter the instructions for these LoUs and in their internal software to avoid scrutiny.
They were sent through an international messaging system for banking called SWIFT, which is used to pass instructions among banks globally to transfer funds.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.
In case of default, the bank issuing the LoU has to pay the liability to the credit giving bank along with accruing interest.
So far, nearly 20 people have been arrested over the last one month in the PNB fraud case.



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