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Private sector lender IndusInd Bank today said it has no direct or indirect exposure to firms floated by scam-tainted Nirav Modi.
The bank, one of the most active lenders in the gems and jewellery sector, however has a “small” exposure to Gitanjali Gems, promoted by Modi’s uncle Mehul Choksi which is also an accused in the Rs 11,400-crore fraud.
“IndusInd Bank has no direct credit exposure to Nirav Modi nor any indirect credit exposure in a statement.
“As regards Gitanjali Gems, the bank has a small, two- digit exposure, not linked to any LoUs,” it added without revealing the amount.
The statement comes more than a week after PNB disclosed that conduct of its officials at the Brady House branch in the financial capital had resulted in a potential fraud of $1.7 billion.
IndusInd Bank statement said the fraud has taken place due to non-adherence of procedures and norms laid down. It termed this as a “stray incident” which will not have any contagion effect on its overall gems and jewellery lending business.
Citing a Gem & Jewellery Export Promotion Council, India (GPEC) press statement, IndusInd Bank said there are stringent norms for bank finance to the gem and jewellery trade stipulated by the Reserve Bank of India and the Government of India.
“The present incident has taken place due to non-adherence of procedures and norms laid down and this stray incident is not expected to have any contagion effect on the overall gems and jewellery business,” it said.
On Wednesday last week, PNB had said it detected a fraud in which diamond merchant Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from one its branches for overseas credit from other Indian lenders, and is being probed by CBI and Enforcement Directorate among other agencies.
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