NEW DELHI: An investigation is underway into the multi-crore fraud that was uncovered at the Punjab National Bank, but there is not much information that the officials have been able to get out of Gokulnath Shetty, the retired deputy bank manager, and two other officials who were arrested on Saturday.
"Arrested accused are not co-operating in the investigation. The involvement and connivance of more staff members and outsiders, including billionaire jeweller Nirav Modi and Mehul Choksi, the managing director of Gitanjali Gems Ltd, is being probed," news agency ANI quoted officials of the Central Bureau of Investigation (CBI).
During the investigation, the arrested bank officials reportedly disclosed that for every Letter of Undertaking that was issued to the company of Nirav of Nirav Modi, a percentage of the amount was fixed depending on how much needs to be sanctioned. It is also reported that the commission in exchange of issuing the LoUs was distributed between all employees of PNB who was involved in it.
Along with Shetty, the CBI also arrested Manoj Kharat, the single window operator (SWO) and Hemant Bhat, the Authorised Signatory of the Nirav Modi Group of Firms on Saturday.
It had emerged that fraudulently issued Letters of Undertaking (LoUs) were issued from the Mumbai branch of PNB in favour of Hong Kong branches of Allahabad Bank and Axis Bank to facilitate Rs 280.7 crore fraud by Nirav Modi and others.
As per the FIR lodged with the CBI, Shetty with the help of his other colleagues had transmitted SWIFT instructions to the above-mentioned banks for raising buyers credit and for funding the Nostro accounts of PNB, without due procedure. The LoUs were issued on behalf of Diamond R US, Solar Exports, Stellar Diamonds.
Banking sources have said in some banks the SWIFT system, which is used for international transactions, and the core banking system works independently of each other. In PNB's case, it said the outstanding LoUs were not available on its core banking system run on Infosys`s Finacle software, thus the LoUs issued went undetected.
PNB has accused three companies - Solar Exports, Stellar Diamonds and Diamond R US - it said belong to Nirav Modi. PNB also named Gitanjali Gems, Gili India and Nakshatra — companies promoted by another jeweller, Mehul Choksi, who is Modi's uncle.