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RBI denies giving instruction to PNB over Nirav Modi case

Nirav Modi, who was alleged to have carried out fraudulent transactions worth over Rs 11,400 crore in PNB.

RBI denies giving instruction to PNB over Nirav Modi case

New Delhi: The Reserve Bank of India (RBI) on Friday denied giving any instruction to the Punjab National Bank (PNB) over Nirav Modi case.

"There have been reports in the media that in the wake of fraud involving a sum of $1.77 billion that has surfaced in PNB, the RBI has directed PNB to meet its commitments under the Letter of Undertaking (LoU) to other banks. The RBI denies having given any such instructions," said Jose J Kattoor, RBI's chief general manager in a statement.

Kattoor further added that the fraud in PNB is a case of operational risk arising on account of delinquent behaviour by one or more employees of the bank and failure of internal controls.

"RBI has already undertaken a supervisory assessment of control systems in PNB and will take appropriate supervisory action," Kattoor said.

The state lender PNB has lodged two financial fraud complaints of Rs 11,400 crore and Rs 280 crore against diamantaire Nirav Modi, his family members and maternal uncle Mehul Choksi.

The billionaire diamond merchant, a regular on the lists of rich and famous Indians since 2013, was booked by the CBI, along with wife, brother and Choksi on January 31, for allegedly cheating the state-run PNB to the tune of Rs 280 crore.

Also, the CBI has approached the Interpol to locate billionaire jewellery designer Nirav Modi and his family who had left the country in the first week of January, weeks before the scam was reported to the agency.

However, CBI and the ED yesterday moved separate applications to MEA seeking the revocation Nirav Modi's passport as well as that of his maternal uncle and his business partner Mehul Choksi, the promoter of Gitanjali jewellery chain.  

(With agency inputs)