Axis Bank's exposure to Nirav Modi, Gitanjali Group Rs200cr

Marsha Scott
March 7, 2018

The SFIO was investigating loans of Rs 5,280 crore to Gitanjali Gems by ICICI Bank-led consortium of 31 banks which gave loans to the company.

The CBI had earlier questioned ICICI Bank executive director NS Kanan as part of its probe.

Choksi along with his nephew, Nirav Modi, fled India in January.

"We have summoned Mehta (the head of the beleaguered state-run bank) and he is expected to appear before us tomorrow", an SFIO official told PTI. "Bank has no exposure in the Nirav Modi group of companies nor has the bank issued any letters of undertaking nor has any buyer's credit exposure against LoUs with either Nirav modi group or the Gitanjali group".

This comes in the midst of reports that the Central Bureau of Investigation (CBI) on Monday kept Vipul Chitalia, VP (saving money tasks), Gitanjali Group, at Mumbai airplane terminal in the Punjab National Bank misrepresentation case.

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Axis Bank revealed that it has a Rs 200-crore exposure to the scam-tainted companies promoted by Nirav Modi and his uncle Mehul Choksi.

Till date, the Enforcement Directorate (ED) has carried out searches at over 198 locations across the country and seized properties worth almost Rs 6,000 crore, while the CBI has arrested at least 18 persons in the case so far. On Tuesday, V Srinivasan, Deputy Managing Director of Axis Bank, visited the SFIO office in Mumbai. He has been taken for addressing at the Bandra-Kurla Complex, an authority said.

Axis Bank clarified that it was not the leading bank in the consortium. Since they had no pre-arranged credit limit, the branch official asked the companies to put down the full amount as collateral so the bank could issue LoUs to authorise the credit.

In case of default, the bank issuing the LoU has to pay the liability to the credit giving bank along with accruing interest. The agency, which secured a 12-day remand of four accused arrested on Sunday, explained the modus operandi involved in the alleged Rs 12,636-crore Punjab National Bank (PNB) fraud before the special CBI court.

Other reports by MaliBehiribAe

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