PNB scam : All that has happened so far Highlights of PNB fraud

On 14 February, one of the biggest bank of India i.e., PNB has disclosed a fraud of $ 1.77 billion that is entirely related to the one of the country’s richest man Nirav Modi who deals in pearls and diamonds.


Key People named in PNB’s complaint

In the CBI complaint, the officers of PNB complained that the fraud was led by Nirav Modi who is billionaire jeweler. Other than this, Nirav Modi is the youngest person who comes on the 85 the position on Forbes’s 2017 list of India’s richest people. PNB also alleges Nirav Modi that he has worked with former PNB employee, Gokulnath Shetty who was posted at Mumbai branch from where this overall fraud originated. Gokul Nath Shetty was a deputy general manager who was looking after import payments in the foreign exchange department.

Central Bureau of Investigation has also posted a copy of the initial complaint on its official website regarding this fraud. On PNB’s complaint, Modi’s office didn’t reply to complaints and emails and that is quite a strange thing.


The fraud is all about

In CBI complaint, PNB has alleged that Nirav Modi and other companies that are linked with him colluded with Gokul Nath Shetty to conduct this one of the biggest fraud. PNB claims that Modis and other persons that are linked with him used fake PNB guarantees worth $1.77 billion to obtain loans from the overseas branches of Indian banks, according to documents that are seen by Bloomberg.


How this PNB’s fraud allegedly start?

According to Rajiv Kumar, India’s top bureaucrat of bank sector has said that this fraud was started in 2011. During 2011 to till now,, Shetty had issued fake letters of PNB undertaking, especially for Nirav Modi. In order to avoid detection, PNB claims that they have bypassed the lender’s internal messaging system and also placed instructions by using SWIFT global payment system. Although PNB is still investigating how this crore of the game has played out.


According to RBI

If blockchain technology was used for transactions & accounting then PNB could have been detecting this Rs. 11, 000 crore and prevent this fraud to happen. Ans still now, no one is understanding that it is very important to implement blockchain technology in the banking sector. Although Nirav Modi has left the country in the first week of january before this PNB alleged scam became public.


Further enhancements

Nirav Modi’s lawyer Vijay Aggarwal told to media “This is your perception that Nirav Modi is anabsconder but he is not absconding. He went out of India for buisness purpose and now his password has been revoked”.

Besides this, CBI also arrested Vipul Ambani who is the president of Modi Fire Star Diamond and this isthe first high-profile connection in this fraud case. CBI officials also said that“Rajnesh Jindal who washolding the charge of Brady House Branch was arrested on Tuesday night from Mumbai”.the PNB managemenet Described the fraud as a case a operartional risk due to unpredictable behavior of  one or more employee reiterated that it was a standalone incident.