India's investigating agency Central Bureau of Investigation has questioned four officers belonging to the Reserve Bank of India in connection with the Rs 13,000 crore Punjab National Bank (PNB) fraud.
The officials belong to the foreign exchange department of the central bank, The Indian Express reported, adding that they were also questioned on the fraud Letters of Undertaking (LoUs) issued to diamond billionaire Nirav Modi’s firms.
The scam came to light on February 14 and the government has appointed the CBI and ED on the case, which is still ongoing. A few PNB officials posted at the Brady House branch of the bank have been accused of generating fake letters of credit that helped Modi's firms loan money from a few foreign branches of the Indian banks. Efforts have been made to bring Modi back to India, but he has not shown any inclination to co-operate with India's investigating agencies.
Meanwhile, PNB's MD and CEO Sunil Mehta recently told Business Standard that the bank was confident of recovering from the losses of Rs 130 billion scam related to Modi and his uncle Mehul Choksi. The bank was also set to file a recovery suit to seal assets of the firms involved in the fraud.
On being asked if PNB feels like it has been made a scapegoat in this incident when other banks were also involved in the transactions with Modi and Choksi, Mehta said they have "lived by the reputation of PNB."
"We have said the letters of undertaking (LoUs) were issued by the employees of PNB. We said even if they were issued fraudulently, PNB will honour its commitment because it’s the matter of reputation of the bank. Also, I will not comment on it as it is a subject matter of investigation. Meantime, to ensure other banks don’t suffer, we have taken adequate precautions and a historic step to honour all the commitments," Mehta told Business Standard.
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