The retired deputy branch manager’s statement has brought the role of the then branch manager under the scanner.
Mumbai: The retired deputy branch manager of Punjab National Bank (PNB), arrested for aiding and abetting diamond businessman Nirav Modi, claimed during his custodial interrogation that issuance of fraudulent Letter of Undertakings (LOUs) was a regular affair in the bank. He added that several officers in the past had also issued fraudulent LOUs. The retired deputy branch manager’s statement has brought the role of the then branch manager under the scanner.
However, the accused former deputy manager Gokulnath Shetty has not revealed any names to the investigators, CBI officials said.
The probe has also revealed that the conniving officer also issued foreign letter of credit (FLC) by entering smaller amounts in the trade finance module of the Core Banking System (CBS) to generate a reference number.
After the reference number was generated, Shetty and Manoj Kharat, a single window operator from the same Brady House branch in south Mumbai, would then send a swift message to the overseas bank branches of Axis Bank and Allahabad Bank in Hong Kong to raise funds.
However, subsequently, they would send a modified swift message with exorbitant and highly inflated amounts under the same reference numbers to the banks without making any change in the trade finance module of CBS.
“We are currently verifying the roles of at least half a dozen bank employees who allegedly colluded with the accused employees. The fraudulent practices could not have gone unnoticed by the branch manager either. His role is also being verified,” said a CBI officer, who is privy to the investigation.