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PNB fraud is tip of the iceberg, money laundering happened during demonetisation: Mamata Banerjee

West Bengal Chief Minister Mamata Banerjee on Sunday took a swipe at Modi government over the Punjab National Bank fraud saying, money laundering happened during demonetization.

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West Bengal Chief Minister Mamata Banerjee on Sunday took a swipe at Modi government over the Punjab National Bank fraud saying, money laundering happened during demonetization.

State-owned PNB has been rocked by the fraud involving billionaire diamond jeweler Nirav Modi who allegedly acquired fraudulent Letters of Undertaking (LoUs) from a branch in Mumbai to secure overseas credit from other Indian lenders. 

"This is just the tip of the iceberg. This big banking fraud was fuelled at the time of Demonetisation. Big money laundering happened during DeMo," Banerjee said in a tweet.

She further claimed that key bank officials were changed. "Who are these people put in? There are more banks involved. The full truth must come out," she said.

Earlier, Congress President Rahul Gandhi launched a scathing attack on Prime Minister Narendra Modi, asking him to explain why it has happened and what steps he is taking to ensure that the banking system is safe in India.

He accused the central government of constantly refusing to accept its responsibility and alleged that the prime minister was "destroying" the economy through his actions, starting from demonetisation.

Punjab National Bank scam was started in 2011 and was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies.

On January 31, the CBI registered an FIR against Nirav Modi, his companies and his uncle Mehul Choski.

The FIR has listed eight fraudulent transactions worth over Rs 280 crore but based on further complaints from the bank the CBI now says the amount investigated in the first FIR is over Rs 6,498 crore, involving 150 Letters of Understanding allegedly fraudulently issued by Shetty and Kharat.

The remaining 150 fraudulent LOUs worth over Rs 4,886 crore issued for Gitanjali group of companies are part of the second FIR registered yesterday by the agency against Choksi and his companies Gitanjali Gems, Nakshatra Brands and Gili, they said.

All these LOUs were issued or renewed during 2017-18, the officials said.

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