The bank made payments to the tune of almost Rs 6600 crore to other banks to whom it owed money on underwriting commitments with regard to the letters of undertakings that were fraudulently issued to the Nirav Modi group. According to the company, the profit during the quarter under review increased to Rs 219.2 crore from Rs 152.4 crore reported for the corresponding period of previous year.
On a related note, the PNB in February detected the multi-crore scam, wherein Diamantaire Nirav Modi and his uncle cum business partner Mehul Choksi had allegedly cheated the bank to the tune of Rs. 114 billion, with the purported involvement of a few employees of the bank. The CBI has named three companies owned by Choksi - Gitanjali Gems, Gili India and Nakshatra Brand Ltd.
Incidentally, BDO India LLP, the firm engaged by PNB to conduct a forensic investigation into the fraud committed by Modi and his companies, has also shared its findings with the U.S. bankruptcy court.
The agency also named PNB Executive Directors K.V. Brahmaji Rao and Sanjiv Sharan, and General Managers Nehal Ahad (who dealt in global operations) and Rajesh Jindal in its chargesheet filed in a special CBI court here.
Looking at the bank's Q4 earnings, financial services company Jeferries said in a report that "the need for a bailout by the government is immediate". PNB's CASA (current account savings account) deposits increased to Rs 2,63,247 crore and its share in overall deposits was 43.85 per cent in March 2018, it said.More news: EU's Tusk says with friends like Trump, who needs enemies?
The agency has alleged Rs 7080.86 crore were siphoned off by Choksi and his companies using 142 letters of undertaking (LoUs) and 58 foreign letters of credit, the officials said.
Earlier this month, the daily had reported that the Bankruptcy Court for the Southern District of NY had asked a global professional services firm, Alvarez and Marsal, to investigate the circumstances surrounding the alleged Rs 13,000 crore bank fraud involving the diamantaire-turned-fugitive.
PNB's share has dropped from a level of Rs 194 crore in January-end before the scam was revealed to a level of Rs 83.85 on Tuesday end of trade after tanking 6% post the announcement of its quarterly results.
The bank's fourth-quarter losses were largely incurred by having to set aside funds to pay the other banks for the illegal guarantees.