Financial

Ex PNB Manager and 3 Other Guilty of Loan Fraud After 24 Years of Trial

The tribunal court has convicted a former Punjab National Bank (PNB) manager and three other people in a loan fraud case after a 24-year trial and sentenced five years imprisonment.

The Tis Hazari court, located in Old Delhi, India, imposed fines from Rs 1 lakh ($1539) to Rs 5 lakh ($7695) to 1992 ex-PNB manager Charanjeet Arora when the case was registered, as well as Sushil Kumar Gupta, Narendra Kumar Gupta, and Manoj Kumar Gupta, a Central Bureau of Investigation (CBI) spokesperson said.

He added that the CBI had registered the case after the allegations that Pankaj Finance and Leasing Limited (PFLL) director Sushil Kumar Gupta, Arora and the other accused entered into a criminal conspiracy with each other.

In addition, the spokesperson said that the firm allegedly got a loan of Rs 23.94 lakh ($36,984) on forged and bogus documents. It was also alleged that a part of the loan was credited in advance against seven vehicles which were already financed by Corporation Bank, Karol Bagh, and the other part was credited on the security of two vehicles without mortgaging the bills and other relevant documents.

“The CBI added that an advance of around Rs 8 lakh ($12,328) was also credited to PFLL for financing four vehicles which were also already financed by the same branch of the bank. Two former bank officials were acquitted by the court and one private person died during the course of the trial,” he added.

The agency filed a charge sheet in the special CBI court in 1994.

During the investigation, the CBI found that the accused spent a credit of Rs 2 crore ($307,800) from the New Bank of India (which later merged with the PNB) Connaught Place branch and Rs 25 lakh ($38,525) from the Corporation Bank in Karol Bagh, Delhi.

A List of India’s Banking Fraud in Fiscal Year 2018

bworld finance - list of India's Banking Frauds

bworld finance – list of India’s Banking Frauds in Fiscal Year 2018

PNB, the country’s second-biggest state-run bank, said in February that celebrity jeweler Nirav Modi and his uncle Mehul Choksi, owner of Gitanjali Gems, defrauded about Rs 12,954 crore ($1,993,620,600). These two jewelers allegedly raised credit from overseas banks based on fraudulent guarantees issued in collusion with rogue PNB staff. Both fled the country in January, a month before PNB filed its first complaint against them. The whereabouts of both the alleged fraudsters are unknown even as the government revoked their passports.

As if the nearly Rs 13,000 crore ($2,000,700,000) fraud mentioned above was not enough, PNB uncovered another credit-guarantee fraud at its Brady House, Mumbai branch which is also at the center of the Nirav Modi scam. The alleged embezzlement of around Rs 9 crore ($1,385,100) involved executives of Chandri Paper and Allied Products company, according to a complaint filed with the CBI.

In another case of bank fraud involving an amount of Rs 515 crore ($79,258,500) and a group of 10 banks including SBI, PNB, and Canara Bank, the CBI arrested two directors of a company, RP Infosystems, over allegations that they had sabotaged the banks by using forged documents to raise credit and ‘siphoned off’ funds.

 

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