PNB issued over 41k LoUs since 2011: Finance Minister

Fraudulent LoUs of the stateowned PNB were used by diamantaire Nirav Modi and his associates to defraud the bank of about Rs 13,000 crore. Following the scam, the Reserve Bank has stopped banks from issuing LoUs and Letters of Comfort for trade finance. 

In a written reply to the House on March 20, Finance Minister Arun Jaitley said that PNB has apprised that 7,672 LoUs were issued with validity of 90 days, 20,078 LoUs were issued with validity of 180 days, 11,224 LoUs were issued with validity of 365 days, and 2,204 LoUs were issued with validity of more than 365 days.

“Further, PNB has informed that the details regarding money withdrawn from the foreign branch of the other banks against each LoU is presently not available as the matter is under investigation,” said the reply made available. Jaitley also said the Reserve Bank of India (RBI) has informed that it does not have “complete/ granular” details of LoUs issued by PNB since 2011 till May 2014 and thereafter. The NDA government had assumed office in May 2014. In reply to another question, Minister of State for Finance Shiv Pratap Shukla said that as per PNB, the total number of LoUs issued to the companies of Nirav Modi, his relatives and the Nirav Modi Group are 1,213, and to Mehul Choksi, his relatives and the Gitanjali Group are 377. 

Meanwhile, the Interpol has sought additional information from the ED about diamond traders Nirav Modi and Mehul Choksi in connection with the over Rs 12,000 crore PNB scam, as part of the process to issue a Red Corner Notice (RCN) against them. Official sources said the global police body asked the central probe agency why it wanted an arrest warrant against the duo.