The Punjab National Bank had requested the Reserve Bank of India to allow it to provide for losses that occurred due to the fraud over four quarters instead of at one go as it expects to recover 40% of the loaned funds.
The Punjab National Bank had requested the Reserve Bank of India to allow it to provide for losses that occurred due to the fraud over four quarters instead of at one go as it expects to recover 40% of the loaned funds.
Bearing the full provisioning loss of over Rs 12,900 crore in the March-end balance sheet could wipe out more than a quarter of PNB’s net worth of Rs48,000 crore, the Economic Times reported.
Citing a person close to the development, the report said that there are wide possibilities that RBI would fulfil PNB's request.
Meanwhile, in a fresh set of summons, the Central Bureau of Investigation (CBI) has asked diamond merchant Nirav Modi and his uncle Mehul Choksi to join the probe related to the multi-crore PNB scam from the immediate effect.
The agency had earlier sent summons on February 19, 23 and 28 asking them to appear on March 7. Gitanjali Gems promoter Choksi, in his seven-page letter which was released by his lawyer, has said it was impossible for him to return to India and join the investigation due to the suspension of his passport and ill-health.
The Punjab national Bank had also filed a new complaint against Nirav Modi alleging that the firms under Nirav Modi's control had misused even legitimate loans and guarantees.
The complaint, registered with the Central Bureau of Investigation (CBI) earlier in the week according to a copy seen by Reuters on Thursday, widens the scope of the investigation into what has been dubbed the biggest bank fraud in Indian history.
Earlier it was reported, the Gem and Jewellery Export Promotion Council (GJEPC) will await responses (to their show-cause notices) from Nirav Modi and Mehul Choksi till this weekend before escalating the matter to higher ups.
Thereafter, the Council will take a final call about suspending membership of the absconding suspects in the over the Rs 12,000 crore Punjab National Bank (PNB) fraud case, on disciplinary grounds.
According to Colin Shah, vice chairman, GJEPC, the deadline for responding to the showcause notice ends this week. "If the explanation doesn't come (by Friday), it will get escalated to the Council's disciplinary committee.
Thereafter, it will be referred to the Board and the Ministry of Commerce and Industry followed by initiating the suspension process of their membership," Shah said, adding that the Council will follow the legalities and procedures laid down to deal with such instances.
The entire process is expected to complete within four weeks from now. If Modi and Choksi fail to respond to the showcause notice, it's most certain that their membership will get suspended.
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 "PNB scam: Bank requests provisioning relief from RBI over multicrore fraud")
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