Mumbai: Widening the scope of investigation into the multi-billion dollar PNB loan scam, the Serious Fraud Investigation Office (SFIO) has summoned the top management of about 31 banks having exposure to Gitanjali Gems.
Among the top executives summoned on Tuesday includes Chanda Kochhar, MD and CEO of ICICI Bank and Shikha Sharma, CEO of Axis Bank. They were asked to appear either in person or send their representatives. While V. Srinivas, deputy-managing director of Axis Bank appeared before the investigating agency, ICICI Bank has sought more time from SFIO to reply to summons.
According to industry sources, ICICI Bank was the lead bank in a consortium that advanced over Rs 5,000 crore as working capital loans to Gitanjali Gems. Mehul Choksi and Nirav Modi, the alleged masterminds behind the Rs 12,700-crore scam, had fled the country in January this year before Punjab National Bank (PNB) made a disclosure to the stock exchanges about the massive fraud at one of its branches in Mumbai.
As part of its investigation into all loans extended to companies associated with Mr Modi and Mr Choksi, SFIO is expected to question more officials from both private and public sector banks. The initial probe by investigating agencies has revealed that about 30 banks had discounted the bills based on PNB LOUs.
In a move that could bring more skeletons from cupboards of state-run banks, the finance ministry had asked them to closely scrutinise all non performing assets (NPAs) above Rs 50 crore to detect any signs of frauds.
Indian lenders have come under increased scrutiny after steps taken by the RBI under the governorship of Raghuram Rajan forced bank officials to stop ever-greening bad loans.
Bad loans, which include NPAs as well as restructured or rolled-over loans, have hit to Rs 9.46 lakh crore at the end of September, which is 12.2 per cent of total loans, according to unpublished RBI data.
