Edited by: Alert India Desk, New Delhi [ Published on: February 16, 2018 14:30[IST ]
In a recent development in one of India’s biggest banking scams, the Reserve Bank of India (RBI) has directed Punjab National Bank (PNB) to pay the entire Rs 113 billion to other banks, says a report.PNB on Wednesday made a startling revelation that it had detected a colossal fraud worth Rs 113 billion in one of its Mumbai branches. Sources from the RBI have told Economic Times that the central bank has made its stand clear in the alleged fraud involving jeweller Nirav Modi.”RBI has made their stand very clear that PNB is liable to pay dues to peer banks. If PNB does not pay up, it will lead to double provisioning– both PNB and 30 other banks will have to provide for the huge loss,” said officials familiar with the development.In a letter to 30 banks, PNB said the other banks had violated RBI norms. “Letters of the undertaking were opened in favour of overseas branches of Indian banks for import of pearls for one-year period as against the RBI guidelines that stipulate only 90-day timeline from date of shipment. This 90-day timeline stipulated has been overlooked by overseas branches of Indian banks,” the letter read.While other banks have rejected PNB’s allegations, the stressed bank has categorically refused to pay back.
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