PNB Scam: ICICI Chanda Kochhar and Axis Bank Shikha Sharma Summoned

PNB Scam: ICICI Chanda Kochhar and Axis Bank Shikha Sharma Summoned

Kochhar and Sharma were summoned to the SFIO's office in Mumbai in connection with the Rs 3,280-crore working capital loan to Choksi's Gitanjali group, News18 reported. A team from Axis Bank, led by deputy managing director V Srinivasan and executives from the trade and transactions department, went to the SFIO office after the agency called them. We have not issued any Letter of Undertaking (LOU) nor do we have any purchaser's acknowledge introduction against LOUs for regard to the Nirav Modi gathering of organizations and in addition the Gitanjali gathering of companies... He was brought in for questioning to the CBI office from Mumbai Airport.

"We have summoned Mehta (the head of the beleaguered bank) and he is expected to appear before us tomorrow", said an SFIO official.

ICICI Bank Ltd has an exposure of Rs750 crore to the Gitanjali group of companies and Rs500 crore to Gitanjali Gems.

Earlier, the agency told the court in Mumbai that Chitalia was the one who put together the fraudulent transactions, along with chairman and managing director of Gitanjali Group, Choksi.

Axis Bank revealed that it has a Rs 200-crore exposure to the scam-tainted companies promoted by Nirav Modi and his uncle Mehul Choksi. While top officials of Axis Bank have met SFIO officials on Tuesday, ICICI Bank has submitted all details to SFIO in the Gitanjali Group investigations, an official with direct knowledge of the matter said.

The developments come in the centre of a scam involving PNB, with the fraud amount of over Rs 12,000 crore based on fraud letters of undertaking (LoUs).

SFIO and Enforcement Directorate (ED) are investigating 31 private and state-run banks that in a consortium gave working capital loans worth Rs5,280 crore to Choksi-controlled Gitanjali Gems Ltd starting 2009, a person with direct knowledge of the matter said. While ICICI Bank stocks tanked 2.64%, Axis Bank stocks fell 1.31%. But, in case of a default, the bank that has issued the LoU has to pay the liability to the credit giving bank along with the accruing the interest.

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