The Reserve Bank of India (RBI) had agreed in principle to a request by Punjab National Bank (PNB) to spread its losses related to the Nirav Modi-Mehul Choksi fraud over four quarters, sources said.

“However, we are still awaiting a written communication from the regulator,” a source at the Delhi-based public sector bank said.

The Directorate of Enforcement (ED) is analysing 120 shell companies in connection with the Punjab National Bank (PNB) fraud allegedly committed by jewellery designer Nirav Modi, the government said today.

The state-owned PNB has been defrauded of over $2 billion by fraudulent use of Letters of Undertaking (LoUs) allegedly by Nirav Modi and his associates.

New Delhi: The Central Bureau of Investigation (CBI) registered a Rs1,394.43 crore bank fraud case against Hyderabad-based Totem Infrastructure Ltd on a complaint by state-run Union Bank of India.

“The CBI registered a case today (Thursday) on a complaint by Union Bank of India against Totem Infrastructure and its promoters and directors Tottempudi Salalith and his wife Tottempudi Kavita of Hyderabad,” a person familiar with the developments said.

In the aftermath of the Rs 129-billion fraud at Punjab National Bank (PNB) involving Nirav Modi and Gitanjali Gems, traders of loose diamonds are now shifting to organised sectoral players with deeper pockets for credit offers to consumers.

Since most banks have tightened their lending to diamond merchants and others are in the process of doing so, many medium and small diamond dealers are approaching large players for credit facility within the industry.

The Reserve Bank of India (RBI) is likely to hold a meeting with the banks affected by the Rs 129-billion scam reported by Punjab National Bank (PNB) to end the stalemate over liabilities related to fraudulent letters of undertaking (LoUs) issued in favour of the Nirav Modi and Mehul Choksi groups of companies.

“The RBI is expected to call a meeting soon to resolve the issue between the banks,” a source said, requesting anonymity.

Amid the multiple scams unearthed recently in the banking sector, the Reserve Bank of India (RBI) has issued a Prompt Corrective Action (PCA) framework to maintain the sound financial health of banks.

The framework facilitates banks in breach of risk thresholds for identified areas of monitoring, such as capital, asset quality (tracked in terms of the net Non-Performing Assets ratio) and profitability, to take corrective measures in a timely manner, in order to restore their financial health.

The Reserve Bank of India has asked commercial lenders to provide it with details of all letters of undertaking - a form of credit guarantee at the centre of an alleged $2 billion fraud - issued by them in the past several years, according to four bankers who have seen the directive.

The regulator is ratcheting up pressure on lenders, increasing its scrutiny and laying down deadlines for them to fix gaps in their systems, in the aftermath of the country's biggest bank fraud.

Mumbai: A New York court, in an order on Friday, dissuaded creditors and lenders to Nirav Modi’s Firestar Diamond lnc. from their debt-recovery processes.

While the firms have not named Punjab National Bank (PNB) as a creditor, the bank still has legal options, according to bankruptcy law experts.

New Delhi: The CBI suspects that the annual audit reports of Punjab National Bank's internal auditors were either suppressed or ignored by the top brass, resulting in non-detection of the Rs 12,636-crore loan fraud by diamantaires Nirav Modi and Mehul Choksi.

CBI sources expressed surprise that the scam continued from 2011 to 2017-2018 without detection by the top brass of the state-run bank although certain inconsistencies had been flagged in the audit reports.

State Bank of India (SBI), the country’s largest lender, on Thursday raised its benchmark lending rates by up to 25 basis points for the first time since the marginal cost-based lending rate (MCLR) regime was introduced in April 2016. One basis point is 0.01 per cent.

The rate hike, effective immediately, comes a day after the bank raised its deposit rates by as much as 50 basis points (bps) across various maturities.

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