Punjab National Bank

About Punjab National Bank

Punjab National Bank, Indias second largest public sector bank, disclosed a 1.8 billion fraud in February 2018. Billionaire jeweler Nirav Modi and his uncle Mehul Choksi had obtained fraudulent letters of undertaking from PNB employees. The LOUs allowed Modi to obtain loans from foreign branches of other Indian banks. The fraud had been ongoing since 2011. Modi fled India before the fraud was discovered. He was arrested in London in 2019 and is fighting extradition. Choksi fled to Antigua. PNB had to absorb the losses, devastating its financial position. The case highlighted weaknesses in the SWIFT messaging system and internal controls at Indian public sector banks. The fraud contributed to concerns about the 9 trillion rupee non performing loan problem in Indian banking.