PNB scam: PM Modi breaks silence, promises 'strict action' against fraudsters

NEW DELHI: Prime Minister Narendra Modi on Friday broke his silence over the Rs 11,500-crore fraud at India's second-biggest public sector bank PNB and promised stringent action against financial irregularities He said his government will not tolerate loot of public money. "I want to make it clear that this government has been taking strict action against financial irregularities and will continue to take strict action," he said at Global Business Summit organised by Economic Times. "System will not tolerate loot of public money," Modi said. Without naming either the alleged kingpin of the fraud, billionaire jeweller Nirav Modi, or Punjab National Bank, the prime minister said the management of financial institutions, auditors and regulators should perform their duty with full dedication. "I want to make an appeal to those who have been entrusted with the job of framing rules and policies and maintaining ethics to do their job diligently and with dedication," he said, adding this should specially be followed by those who have been entrusted with the responsibility of supervision and monitoring. Congress President Rahul Gandhi had repeatedly targeted Narendra Modi over his 'silence' in the PNB scam. The Punjab National Bank has been defrauded of Rs 11,500 crore allegedly by diamond merchant Nirav Modi and his business partner Mehul Choksi after obtaining fraudulent letters of undertaking (LoUs) from one PNB branch in Mumbai between 2011 and 2017 to obtain loans from Indian banks overseas. The scam was started in 2011 and was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies. Nirav Modi was initially charged last month with causing a wrongful loss of Rs 280.70 crore to PNB in 2017 after hatching a conspiracy with two bank officials to defraud the bank. The other partners who were allegedly involved in fraudulent transactions were Nirav's wife Ami, brother Neeshal and maternal uncle Mehul Choksi, who owns Gitanjali Gems. Last week, PNB filed two more complaints against Modi after it realised that the fraud could involve at least Rs 11,500 crore of its money. The estimated scale of the fraud of Rs 11,500 crore is more than eight times PNB's net profit of Rs 1,325 crore in the financial year ended March 2017. The crisis could impact the bank's profitability this year. Nirav had left India on January 1, and is believed to be in Switzerland. Nirav's wife Ami, a US citizen, and business partner Mehul Choksi departed on January 6. (With PTI inputs)