Lender UCO has $412 mln exposure in Indian banking fraud case

Gitanjali Gems

18/02/2018 12:12

MUMBAI, Feb 18 (Reuters) - India's state-run UCO Bank 
 UCBK.NS  said it has $411.82 million in exposure to fraudulent 
transactions carried out at Punjab National Bank (PNB) 
 PNBK.NS . 
    PNB, India's second-largest state-run lender, said on 
Wednesday that it had detected fraudulent transactions worth 
$1.77 billion at a single Mumbai branch that had benefited "a 
few select account holders", and that it had reported the matter 
to law enforcement agencies.  urn:newsml:reuters.com:*:nL4N1Q45DF 
    UCO Bank, in a filing to the Bombay Stock Exchange late on 
Saturday, said its Hong Kong branch granted loans against 
letters of credit issued by PNB and was "fully confident" of 
receiving payment from PNB. 
    The alleged fraud at PNB benefited billionaire jeweller, 
Nirav Modi and jewellery retailer Gitanjali  GTGM.NS  
 urn:newsml:reuters.com:*:nL4N1Q45DF 
    India's federal police detained two employees of Punjab 
National Bank and an employee Nirav Modi's company.  urn:newsml:reuters.com:*:nL4N1Q703S 
    Indian banks could take a hit of more than $3 billion from 
loans and corporate guarantees provided to diamond companies at 
the centre of the alleged fraud at PNB, the tax department has 
estimated.  urn:newsml:reuters.com:*:nL4N1Q707R 
    On Sunday, India's financial crime agency, the Enforcement 
Directorate, conducted searches at various locations of 
companies tied to Modi and Choksi, a government official said, 
but did not wish to be identified as he was not authorized to 
speak to media. 
 
 (Reporting by Rajendra Jadhav; Editing by Toby Chopra and Susan 
Fenton) 
 ((rajendra.jadhav@thomsonreuters.com; +91-22-6180-7153 ; 
Reuters Messaging: 
rajendra.jadhav.thomsonreuters.com@reuters.net)) 
 
Keywords: UCO PUNJAB NATL BANK/FRAUD