Sources say no condition has been set for payouts related to LoUs in the ₹12,968 crore scam
Sources say no condition has been set for payouts related to LoUs in the ₹12,968 crore scam
Punjab National Bank has asked for certain information from peer banks, but no condition has been set for payouts related to LoUs in the ₹12,968 crore scam involving Nirav Modi and his firms, sources said.
Bankers aware of the development said as the matter was under investigation by the CBI, no final call on LoU payouts could be taken as of now.
“PNB has been calling for certain information from other banks to ascertain if there were any deficiency or laxity on the part of those other banks, if they also had some system lacunae or might have compromised on their system, things like that,” a bank official said on the condition of anonymity.
On what had been derived among the banks on the liability of PNB towards other banks to pay against the Letters of Undertaking (LOUs) on the basis of which peer lenders made import credit payments to Nirav Modi and his firms, the official said, “As the investigations are going on, there is no final call on LOUs payouts.”
As the investigation process was normally a long-drawn affair, the bankers fear they would be compelled to declare the portion of their exposure in the LoU fraud as non-performing.
To plug the loopholes, PNB has started the process of urgently integrating SWIFT, with its core banking solution (CBS) system. A new software, Financle 10, had been installed and was in the testing phase. “It is a superior system and would enable the bank at mid office and head office to view transactions of all branches through one administration,” PNB said.
Punjab National Bank has asked for certain information from peer banks, but no condition has been set for payouts related to LoUs in the ₹12,968 crore scam involving Nirav Modi and his firms, sources said.
Bankers aware of the development said as the matter was under investigation by the CBI, no final call on LoU payouts could be taken as of now.
“PNB has been calling for certain information from other banks to ascertain if there were any deficiency or laxity on the part of those other banks, if they also had some system lacunae or might have compromised on their system, things like that,” a bank official said on the condition of anonymity.
On what had been derived among the banks on the liability of PNB towards other banks to pay against the Letters of Undertaking (LOUs) on the basis of which peer lenders made import credit payments to Nirav Modi and his firms, the official said, “As the investigations are going on, there is no final call on LOUs payouts.”
As the investigation process was normally a long-drawn affair, the bankers fear they would be compelled to declare the portion of their exposure in the LoU fraud as non-performing.
To plug the loopholes, PNB has started the process of urgently integrating SWIFT, with its core banking solution (CBS) system. A new software, Financle 10, had been installed and was in the testing phase. “It is a superior system and would enable the bank at mid office and head office to view transactions of all branches through one administration,” PNB said.