New Delhi: Indian banks could take a hit of at least $2.74 billion (Rs 17,600 crore) from loans and corporate guarantees provided to Punjab National Bank in a Rs 11,400-crore fraud case, the tax department said on February 17.
As of March 2017, banks had extended loans and guarantees worth Rs 17,600 crore to companies tied to billionaire jeweler Nirav Modi and his uncle Mehul Choksi, the tax department said in a note seen by news agency Reuters.
But the total hit to banks “may well exceed” that amount, the department said in its note.
The whereabouts of Nirav Modi, whose high-end jewelry has been worn by Hollywood stars including Kate Winslet, is unknown. However, TV channels traced him to a swish 36th-floor suite at JW Marriott’s Essex House in New York. Modi spent the day holed up in the suite, which overlooks New York’s famed Central Park.
The scale of the fraud has sparked a slew of probes into the lender, as well as into Nirav Modi, his uncle Choksi and companies affiliated to both.
The Income Tax Department has extended a probe into Nirav Modi and his group companies, looking into possible tax evasion and suspected investment of illegal funds, a spokeswoman told Reuters on Saturday.
The spokeswoman said 29 properties and 105 bank accounts of Nirav Modi and his group companies had been seized.
The Central Vigilance Commission (CVC), which investigates corruption in the government, summoned the PNB management and finance ministry officials to appear before it, news agency ANI reported earlier on February 17.
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