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World

AFP
February 15, 2018

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Indian bank reports $1.8b fraud at single branch

MUMBAI: India’s second-largest state-run bank said Wednesday it had detected fraud of almost $1.8 billion at one of its branches, sending its shares plunging more than nine percent.

The Punjab National Bank (PNB), one of several state-owned lenders the government is trying to clean up, said transactions worth $1.77 billion had been made “for the benefit of a few select account holders with their apparent connivance”.It said they had occurred at a single branch in India’s financial capital Mumbai.

“Based on these transactions other banks appear to have advanced money to these customers abroad,” the bank said, adding that the fraud had been reported to enforcement agencies for further investigation. The bank did not give any further details, or say which lenders were affected. It is unclear whether the latest statement is related to an earlier allegation that billionaire jeweller Nirav Modi and others defrauded the bank of more than $40 million. Last week, the Central Bureau of Investigation (CBI) said it was looking into allegations about Modi, one of the country’s richest men.

“Earlier this month, a first information report was lodged by PNB and we raided various locations. Investigations are still ongoing,” CBI spokesman Abhishek Dayal told AFP Wednesday. Modi is worth $1.73 billion according to Forbes, placing him 85th on India’s rich list.

The 47-year-old is the founder of jewellery giant Firestar Diamond while his high-end Nirav Modi brand has stores in some of the world’s major cities. Requests for comment from Modi’s spokesman went unanswered Wednesday.

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