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Nirav Modi fraud is bank’s issue, won’t seek govt help: PNB


New Delhi:Punjab National Bank (PNB) will take care of problems emanating from Rs 13,000-crore fraud perpetrated by billionaire jeweller Nirav Modi on its own and will not seek any government’s assistance, its managing director Sunil Mehta said.
The bank has enough resources and capability to meet the challenges posed by the fraud of this nature, he said.
“We said this is problem of the bank and we will solve it ourself. We are not seeking government’s help by way of capitalisation,” he said, when asked if the bank has sought help from the majority shareholder to tide over the problem of fraud.
“Government whatsoever they have given in the normal process of the recapitalisation plan. We have not asked for any additional support because we think PNB has capacity and capability to mobilise resources in-house,” he told PTI in an interview.
Giving details, he said, PNB has mobilised roughly Rs 12,000 crore post September last financial year.
“We have mobilised Rs 5,000 crore through QIP (qualified institutional placement), Rs 1,300 crore by selling stake in PNB Housing Finance and Rs 5,400 crore through government infusion. We are adequately capitalised to carry forward our business of credit,” he said.
“These mobilised funds besides Rs 1,100 crore of my profit which the bank earned in three quarters (FY2017-18). That is also providing me cushion. So that profit coupled with this capital will provide me adequate cushion to take care of loss and still continue to grow,” he said.
Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of over Rs 13,000 crore through fraudulent Letters of Undertaking (LoUs).
A Mumbai branch of PNB had fraudulently issued LoUs for the group of companies belonging to Nirav Modi since March 2011.
Different investigating agencies, including CBI, I-T and enforcement directorate, are probing the fraud, dubbed as the biggest banking scam in the country.
PNB had issued as many as 1,590 LoUs to Nirav Modi, Mehul Choksi and their associates.