Punjab National Bank uncovered another credit-guarantee fraud at the Mumbai branch that is at the center of a US$2 billion fraud, Reuters reported March 15.
The bank reportedly uncovered fraud of about 91 million rupees involving the executives of a company called Chandri Paper and Allied Products, according to a complaint the bank filed with India's Central Bureau of Investigation. The lender alleged that two officials at its Brady House branch in Mumbai "entered into a criminal conspiracy" with the directors of the company in April 2017 to issue two letters of undertaking for the company to raise the money.
The two officials were also involved in the more than US$2 billion fraud. In what has been called India's biggest banking scam, Punjab National Bank alleged that some of its employees colluded with jeweler groups headed by Nirav Modi and uncle Mehul Choksi to get fraudulent letters of undertaking.
A bank spokesman had no immediate comment on the Chandri Paper case. Reuters could not reach Chandri Paper for comment. Punjab National Bank has not responded to calls from the Bombay Stock Exchange to provide clarification on the complaint.
As of March 15, US$1 was equivalent to 64.98 Indian rupees.
