Published: Wed, March 07, 2018
Worldwide | By Sean Reid

Axis Bank's exposure to Nirav Modi, Gitanjali Group Rs200cr

Axis Bank's exposure to Nirav Modi, Gitanjali Group Rs200cr

Kochhar and Sharma were summoned to the SFIO's office in Mumbai in connection with the Rs 3,280-crore working capital loan to Choksi's Gitanjali group, News18 reported. As per a Moneycontrol report, ICICI Bank has no exposure to Nirav Modi group of companies, but have given working capital loans along with a consortium to Gitanjali group.

Sources said that officials from Punjab National Bank are likely to visit the office on Wednesday. However, this did not stop the federal probe agency, the CBI, from questioning its Executive Director NS Kanan last week. Meanwhile, Nirav's company Firestar Diamond International Private Ltd moved Delhi High Court against seizure of properties by the ED.

ICICI Bank chief executive Chanda Kochhar and Axis Bank chief executive Shikha Sharma were summoned by the SFIO to help the agency understand the amount of exposure and whether due diligence was followed while lending.

ICICI Bank Ltd has an exposure of Rs750 crore to the Gitanjali group of companies and Rs500 crore to Gitanjali Gems.

Axis Bank also confirmed in a statement to exchanges that SFIO has sought information on the accounts of Modi and the Gitanjali group.

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Later, V Srinivasan, deputy managing director of Axis Bank was seen exiting the SFIO office in south Mumbai. SFIO sources indicated they may soon summon other banks that are part of the consortium.

"In the normal course of trade business, the bank, through the overseas branches, undertakes transactions against LoUs (Letters of Undertaking) issued by other banks. Some of the banks have already started replying", said an ED official.

The fraud was allegedly perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems.

Choksi is facing allegations for getting letters with Nirav Modi Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) of Rs 12,636-crore issued in favor of the foreign branches of Indian banks based on the fraud claims on both.

Bankers say in many Indian banks the SWIFT system, which is used for worldwide transactions, and the core banking system work independently of each other.

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