Nirav Modi (right) and Mehul Choksi are at the centre of the Rs11,400 PNB fraud. Mumbai: Punjab National Bank (PNB), India’s second-largest public sector bank, stunned the country’s financial sector on 14 February when it announced it had discovered an alleged fraud worth $1.8 billion (about Rs11,400 crore) at a single branch in Mumbai. The following is an explainer on the PNB fraud and its implications for other lenders and India’s banking sector:What is the fraud allegation about? Modi’s companies colluded with the bank staff, PNB said, adding that it suspected some officials at foreign branches of other Indian banks that extended credit were also involved. In a 12 February “caution notice” addressed to chief executives of 30 banks, PNB said the other banks also have a share in the blame as they “overlooked” certain Indian central bank rules.

Source: Mint February 26, 2018 13:41 UTC