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15 Feb 2018

PNB fraud case: Govt. revokes Nirav Modi's passport

The government on Thursday announced that it had revoked the passport of the absconding Nirav Modi, the billionaire jeweller who recently became notorious after defrauding the Punjab National Bank of Rs. 11,400 crore.

Law Minister Ravi Shankar Prasad also said that assets worth Rs. 1,300 crore had been seized from Modi, and a look-out-notice had been issued against the jeweller.

Here's more on the scam.

In context

PNB fraud case and Nirav Modi: A walkthrough


Nirav Modi and his confidantes left India in early January

Nirav Modi, who is currently being investigated by the CBI, left India on January 1, much before the Punjab National Bank's 29th January complaint to the CBI regarding a Rs. 280.7 crore fraud.

Modi's brother Nishal, who is a Belgian citizen also left on January 1, and Modi's wife Ami, a US citizen, along with Modi's business partner Mahul Choksi left on January 6.


The alleged fraud by Nirav Modi is India's largest

The Rs. 11,400 crore fraud, which was roughly eight times PNB's 2017 net income of Rs. 1,320 crore, came days after Nirav Modi, his brother, and his wife were booked for cheating PNB of Rs. 280.7 crore.

Following the announcement of the fraud on February 14, which is the largest ever loan fraud in Indian history, PNB's shares have tumbled about 20% this week.

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PNB registered a FIR on 31st January after confirming fraud

Sunil Mehta, the director of Punjab National Bank, which is the second largest state-led lender in India, said that the bank had first detected the fraud in 2011.

On 3rd January 2018, the bank got to know that two staffers were involved in unauthorized transactions.

On 29th January, PNB went to the CBI, and on 31st January, a First Information Report (FIR) was registered.

Whose money?

Whose money was lost in the fraud?

Commercial banks have two sources of money - the RBI and customers.

Since money lent by the RBI is essential to maintain the cash reserve ratio, it's the customer's money which has been lost.

The Rs. 11,400 crore fraud poses further questions about the health of the Indian banking sector, which is already grappling with of the worst bad-loan ratios among big economies worldwide.

Rahul Gandhi takes a shot at the BJP

BJP and Congress take swings at each other over fraud

Political reactions

BJP and Congress take swings at each other over fraud

Congress President Rahul Gandhi's jibe at PM Modi and the BJP, citing Mallya and Nirav Modi's examples, was supported by Congress spokesperson Randeep S Surjewala.

Meanwhile, Union Law Minister Ravi Shankar Prasad said that Nirav Modi had had no ties to PM Modi's Davos delegation.

Union minister SP Shukla and Defense Minister Nirmala Sitharaman blamed the erstwhile UPA government for not probing the fraud.

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