The Punjab National Bank (PNB) fraud case of 2018, one of the most infamous financial frauds in Indian history, has gained further attention with the recent arrest of one of the main accused, Mehul Choksi, in Belgium. The case, first uncovered in 2018, involved fraudulent transactions worth approximately Rs 13,500 crore, and involved besides Choksi, his nephew, Nirav Modi.
What Was the PNB Fraud Case
The Punjab National Bank fraud case involves fraudulent transactions amounting to approximately Rs 13,500 crore. It came to light in 2018 and was primarily orchestrated by jeweller Nirav Modi, his uncle Mehul Choksi, and certain PNB employees.
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The fraud was executed by misusing Letters of Undertaking (LoUs), which are guarantees issued by the bank for overseas credit. Between 2011 and 2018, two employees at PNB’s Brady House branch in Mumbai issued unauthorised LoUs via the SWIFT system, bypassing the bank’s core systems. This allowed Modi’s firms, including Diamond R US and Solar Exports, to obtain loans from other Indian banks’ overseas branches without proper collateral.
Arrest of Mehul Choksi
Choksi, the wanted diamantaire and founder of Gitanjali Gems, who is a prime accused in the case, received residency status in Belgium on November 15, 2023. After being on the run for years, Choksi was arrested in Belgium on April 12, 2024 following a request by the Indian authorities, including the Central Bureau of Investigation (CBI) and the enforcement directorate (ED).
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According to media sources, Choksi had claimed that he was unfit to travel to India due to health issues, citing this as the reason for his presence in Belgium for medical treatment. However, Indian agencies contested this argument, stating that if he was healthy enough to travel abroad for treatment, he should also be fit enough to return to India and face legal proceedings.
Hariprasad, the whistleblower in the PNB scam, told news agency ANI that Choksi, known for escaping legal proceedings with a fleet of lawyers, might try to delay his extradition to India. However, he expressed hope that the Indian government would succeed this time.
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Meanwhile, the CBI has filed two chargesheets, and the ED has filed three prosecution complaints against Choksi in the case.
According to news agency PTI, after the Interpol Red Notice against Choksi was lifted, Indian agencies, including the ED and the CBI, began proceedings to extradite him from Belgium.
Nirav Modi, who has been declared a fugitive economic offender, is currently held in a London prison. He was detained in 2019 after Indian authorities, including the CBI and ED, sought his arrest in connection with the PNB scam. Modi is actively contesting his extradition to India.
