A police complaint was filed by PNB against Nirav Modi and mehul choksi for defrauding the bank of Rs.281 crore by colluding with some bank officials. The probe was later taken over by CBI. Last month, PNB revised the amount involved in the fraud to Rs.12600 crore.
How it is started :-
Officials at PNB's Brady House branch in mumbai issued LoUs (letter of undertaking) to enable companies belonging to Nirav Modi and Mehul Choksi to access forex credit from other indian banks abroad. They neither sought any collateral nor did they record LoU issuance in the bank's core banking systems required. The integration of of SWIFT, a global cash transfer messaging service, with the bank's CBS was non-functional in this case. Whenever the LoUs came up for renewal, fresh LoUs of higher amounts were issued to rotate the credit.
