PNB fraud: ICICI Bank says no exposure with Nirav Modi group of companies

ICICI Bank said, "We have not issued any Letter of Undertaking (LOU) nor do we have any buyer’s credit exposure against LOUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies."

ICICI CEO Chanda Kochhar at the launch of "Software Robotics" at ICICI Bank Head Quarters in Mumbai. Photo: IANS

After reports that the Central Bureau of Investigations (CBI) questioned ICICI Bank Executive Director NS Kanan, the bank clarified today that it has no exposure with Nirav Modi group of companies, but added to have lended to Mehul Choksi's Gitanjali Group.

BSE on Wednesday sought clarification from ICICI Bank asking about an article written in MoneyControl with headline, "ICICI Bank has exposure to Gitanjali Group, not Nirav Modi firms; CBI questions bank's executive director."

ICICI Bank's Kanan was questioned by CBI on Tuesday regarding an alleged fraud of Rs 12,700 crore against state-owned Punjab National Bank (PNB) by two big jewellers namely Nirav Modi and Gitanjali Gem's owner Mehul Choksi.

ICICI Bank replied stating, "We have not issued any Letter of Undertaking (LOU) nor do we have any buyer’s credit exposure against LOUs with respect to the Nirav Modi group of companies as well as the Gitanjali group of companies."

"We are working capital lenders to the Gitanjali group of companies along with several other banks in the consortium," ICICI Bank said, assuring that their exposure to the Gitanjali Gems is not the largest among lenders.

"We are fully co-operating with the investigating agencies in their efforts," ICICI Bank statement added.

As per the report, a loan totalling Rs 5,280 crore was given to the Gitanjali Group by a consortium of 31 lenders.

However, on Wednesday, after the news, the share price of ICICI Bank saw selling pressure so much so that it tumbled by more than 2%, before finishing at Rs 313.50 per piece down by 1.92% on the BSE.

PNB fraud case, which came into light on February 14, has hit the banking system hard.

The Finance Ministry on Tuesday, directed top officials of public sector banks (PSBs) to examine their entire non-performing loan (NPL) accounts in order to derive possible instances of fraud, reiterating existing norms.

Rajiv Kumar, secretary, financial services in the Finance Ministry, twitted, "15 day deadline for PSBs to take pre-emptive action and identify gaps and weaknesses to gear up for rising operational and technical risks; Clear accountability of senior functionaries."

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