PNB fraud case: SFIO summons ICICI Bank Chief, Axis Bank MD

Posted March 07, 2018

ICICI Bank is the leader of a consortium of lenders to Mehul Choksi's Gitanjali Gems, and has an exposure of ₹500 crore.

The CBI told the court that its investigation had found that the fraudulent issuance of letters of undertaking (LoUs), or guarantees, through a Mumbai branch of the bank had been going on since 2010.

SFIO is understood to have also called officials from other banks including ICICI Bank, they said. Since they had no pre-arranged credit limit, the branch official asked the companies to put down the full amount as collateral so the bank could issue LoUs to authorise the credit.

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Bombay Stock Exchange (BSE) has sought clarifications from both banks about the news, but neither had responded. Kochhar and Sharma will appear before the agency this afternoon. Both of them have been accused of being in the centre of the Rs 11,400 bank fraud. Its exposure to the Gitanjali group, it said, is not the largest among the lenders in the consortium.

Chitalia was brought to the Central Bureau of Investigation office at the Bandra-Kurla Complex for interrogation. "Our presentation to the Gitanjali gathering of organizations isn't the biggest among moneylenders in the consortium", the bank had stated, including that it was "completely co-working with the researching offices in their endeavors". PNB has lent Rs 587 crore as working capital, while ICICI Bank has lent Rs 405 crore to Mr Choksi's firms.

The SFIO, which is the investigating arm of the Ministry of Corporate Affairs, earlier today recorded statements of senior officials of private sector lenders Axis Bank and ICICI Bank in connection with its probe into the alleged scam at the Punjab National Bank. He didn't unveil some other insights about Chitalia's affirmed part in the PNB misrepresentation. In PNB's case, it said the outstanding LoUs were not available on its core banking system run on Infosys's Finacle software, and so went undetected.

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