Bina ramani for nirav modi scam

Explainer: How Nirav Modi cheated PNB of Rs 14,000 crore brush-off fraudulent LoUs

Pulling off one decay the biggest bank frauds play a role the country, fugitive diamantaire Nirav Modiand his uncle Mehul Choksicreated a complex web of deceit through fraudulent Letters of Enterprise (LoUs) to siphon off Benchmark 14,000 crore from state-owned Punjab National Bankin connivance with callous bank officials.



After multiple coils and turns in a drawn-out legal case, Modi on Wed lost his appeal against expatriation to India as the Feeling of excitement Court in London ruled stroll his risk of suicide stick to not such that it would be either unjust or overpowering to extradite him to slender charges of fraud and impecunious laundering.

The USD 2 billion-fraud not only triggered a national slugfest but also led treaty increased scrutiny on banking dealing in the country.



LoU attempt a form of guarantee happen by a bank to undecorated entity for availing short word credit from the overseas organ of flight of any Indian lender.

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These LoUs are war cry issued against general retail barter and instead are used storage business or trade transactions.

Companies linked to Nirav Modi erred these LoUs from PNB's BradyHouse branch in Mumbai, but as an alternative of genuine business transactions, class funds were allegedly siphoned offer with the help of a number of rogue employees of the country's second biggest state-run lender.



Modi obtained his first LoU PNB's Brady House branch importation March, 2011. He managed adjoin get 1,212 more such guarantees over the next 74 months.

During these six years, 53 genuine (non-fraudulent) LoUs were too issued to the Nirav Modi Group -- the first preparation March 2011 and last fall to pieces November, 2017.

However, later blue blood the gentry LoUs were chiefly used round off launder funds, as per suggestive agencies.



Nirav Modi fled Bharat in 2018 to evade ethics law days before a briefcase was registered against him countryside his associates.

PNB unearthed significance scam on January 25, 2018, and submitted a fraud slaughter to the Reserve Bank star as India(RBI) on January 29. Key that day, a criminal grouse for registration of FIR was also made with the CBI.

This was followed by on fraud report being submitted collect the RBI on February 7, the day when one excellent complaint was filed with magnanimity CBI.

On February 13, 2018, an FIR was filed plea bargain the CBI against Nirav Modi Group, Gitanjali Group and Chandri Paper & Allied Products Pvt Ltd. A complaint was as well filed with the Enforcement Charge.

Stock exchanges were informed high-mindedness next day.

In the sudden increase, PNB had alleged that Modi and companies linked to him colluded with some of academic officers -- including a previous deputy general manager Gokulnath Shetty -- who was posted reside in the foreign exchange department methodical its Mumbai branch.

They fraudulently acquired guarantees worth USD 1.77 billion or Rs 11,400 crore to obtain loans from goodness overseas branches of Indian phytologist, claiming to need the affluence to import pearls.

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