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PNB Fraud: VP of Gitanjali arrested, top brass of private banks questioned

Gayathri Udyawar
/ Categories: Markets, DSIJ Mindshare
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After a round of PSU bank stocks being battered by the market, the private banks are facing the heat following investigation of loans given to Mehul Choksi-led Gitanjali Group.


Vipul Chitalia, Vice President of Gitanjali Group of Companies, was arrested from Mumbai airport on Tuesday for his alleged role in the Nirav Modi and his uncle Mehul Choksi's scam. It is alleged that Rs. 12,636 crore was siphoned-off the banking system by the duo.


The investigation agencies are now probing 31 banks who have lent a sum of around Rs 5,000 crore to Gitanjali Gems since 2009 as working capital, said news report. In connection with this lending, the Serious Fraud Investigation Office and the Enforcement Directorate summoned the CEO of ICICI Bank, Chanda Kochhar and Shikha Sharma who heads Axis Bank.


Earlier, ICICI Bank had clarified to the exchanges that the bank is part of a consortium that has lent working capital to Gitanjali Group and that this exposure had no material impact on the bank.


With respect to the Nirav Modi PNB fraud, former Deputy Manager of Punjab National Bank, Gokulnath Shetty has been now remanded to police custody. 


Reacting to these news updates, the stock of Axis Bank was at Rs. 515.50 per share, down by 0.36 per cent, ICICI Bank was at Rs. 289.55 per share, down by 1.86 per cent. Meanwhile Bank Nifty was at 24,300.45, down 148.00 point or 0.61 per cent and Nifty50 was at 10,214.10, down 35.15 points or 0.34 per cent at 10:11 hours on Wednesday.



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