Nearly 30 banks paid out funds based on LoUs issued by PNB: Report

New Delhi, Mar 12: Nearly 30 banks are said to have paid out funds based on letters of undertaking (LoUs) issued by Punjab National Bank on behalf of jewellers Nirav Modi and Mehul Choksi and their companies,
A parliamentary committee’s report names banks such as State Bank of India, Union Bank of India, Allahabad Bank and Axis Bank among those that honoured the PNB guarantees, a national newspaper reported today.
The parliamentary committee’s report also includes foreign lenders.
“International branches of many other Indian banks, it is believed as many as 30, including State Bank of India, Union Bank of India, Allahabad Bank, Axis Bank and some foreign banks, lent money to a particular entity or many entities or companies based on these alleged fraudulent guarantees,” the committee said in its report.
The committee has also asked the finance ministry to launch an inquiry into human and systemic elements of the alleged scam, the ET report said.
The government will discuss all the recommendations made by the committee with the regulator and other stakeholders, sources said.
“A multi-agency probe has already been ordered and letters of request to 13 countries have been sent seeking details of properties, bank accounts of companies,” the official added.
The fraud is estimated at Rs 12,700 crore. It was initially estimated at Rs 11,300 crore. The scam was brought to the public attention after PNB statement last month.