Wednesday, 24 October, 2018

RBI penalises Axis Bank, IOB for violating NPA, KYC norms

Melinda Barton | 07 March, 2018, 20:40

Nearly 31 banks are a part of a consortium which had given Rs 5,280 crore working capital facility extended to Choksi's companies of which ICICI Bank is the lead lender.

Investigative agencies are probing all loans and facilities extended to Mehul Choksi and Nirav Modi and their associate companies in the Rs 12000 crore fraud which hit Punjab National Bank last month.

According to the Central Bureau of Investigation (CBI), the government-run PNB official Gokulnath Shetty would return these documents to top company officials after issuing the letters that enabled Nirav Modi and his uncle Mehul Choksi's companies to get credit overseas.

Reports quoting sources said investigators have not yet recovered all the papers and loan guarantees allegedly issued by rogue employees of the bank, which they believe could lead to greater exposure of the bank to the fraud.

Before this, CBI has detained Vipul Chitalia, the Vice President of Gitanjali Group of Companies, as a part of its probe into the PBN scam.

While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on LoUs issued by PNB. The fraud investigative agency has recorded the statements of Axis bank representative in the case. "The bank will submit all the required documents to the authorities", said an Axis Bank official.

The SFIO, which is the investigating arm of the Ministry of Corporate Affairs, is expected to call officials of almost 31 banks that have an exposure to companies of Mr. Nirav Modi and Mr. Choksi.

Meanwhile, shares of Axis Bank, which has Rs 200-crore exposure to the scam-tainted companies promoted by Nirav Modi and his uncle Mehul Choksi, also fell 1.20 per cent to hit an intra-day low of Rs 510.55 on BSE.

Axis Bank Deputy Managing Director V Srinivasan and other officials from the trade and transactions department of the bank reported at the SFIO's office in Mumbai on Tuesday.

A special court on Saturday had issued non-bailable warrants (NBWs) against Modi and Choksi in the alleged scam. The officials were in the office for over two hours and are understood to have been asked about their business with firms like Choksi's Gitanjali Gems and also Nirav, as per sources.