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State Bank of India Chairman Rajnish Kumar on Friday clarified that the bank has no direct exposure to the controversial diamond dealer Nirav Modi, but admitted to some transactions with Punjab National Bank in this case.
PNB has reportedly been defrauded of ₹11,300 crore through fraudulent issuance of letters of undertaking in a scam whose dimensions are still unfolding.
‘Onus on PNB’
On the sidelines of a press meet in Kochi, Rajnish Kumar revealed that the SBI has over $200 million exposure to PNB connected with the LoU transactions with Modi; of this, $90 million was made through SBI’s Mauritius subsidiary.
“Our exposure to PNB alone was $212 million. There has been absolutely no lapse on our part and we have followed all standard operating procedures. The onus is now on PNB and we are confident of fully recovering the amount.”
The Chairman was clarifying SBI’s position that it would contest PNB’s claim that the 30 banks who are involved were also responsible as they did not follow due procedure.
Earlier, he said banking is a risky business and banks adhere to certain regulations to manage those risks. “How you manage the risk is vital. If there is a breach of trust, banks have several areas for detection like surprise checks, regular audits, and so on.”
Rajnish Kumar was here in connection with the opening of the bank’s Global NRI centre.
SBI has undertaken elaborate risk-management practices and has an internal audit system which is well-recognised, he said. One of the practices is job rotation from sensitive positions every three years. SBI’s exposure to the gems and jewellery sector is hardly 1 cent of disbursements, he said.
“The notion that the majority of the loans goes to the corporate sector is wrong. Of the total loan portfolio, 60 per cent is retail,” he added.
Meanwhile, the CBI on Friday registered an FIR against Modi’s uncle Mehul Choksi and his Gitanjali Group of companies based on a February 13 complaint by PNB. The FIR, according to sources, named three companies owned by Choksi — Gitanjali Gems, Gili India and Nakshatra Brand.
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