It is not so surprising if we hear about any scams now a days. As it is common for billionaires to earn money through illegal means and then get out of it or get out of the country..!!🤣
Here is another biggest scams in the history of diamond business. I am talking about the businessman Nirav Modi. Some of you might heard of him. Nirav modi is A diamond jewellery designer and trader. Nirav Modi is a global diamond jewelry house established in 2010 by founder, Nirav Modi.
Scam:
Companies owned by diamond merchants Nirav Modi is alleged to have swindled Punjab National Bank of over Rs11,000 crore .
Between 2011 and early 2018. It was detected in the third week of January 2018, according to the PNB management which approached the Central Bureau of Investigation on Jan. 29.
In 2011, it began with a much smaller amount with a single letter of undertaking worth around Rs 800 crore through Punjab National Bank. The first LoU was issued by two PNB employees on behalf of the bank via SWIFT, sanctioning loans to be disbursed abroad. The two employees are said to be involved in the scam and is out of contact right now. SWIFT, is a system to send instant messages. Once a foreign bank or a foreign branch of a bank gets the LoU via the SWIFT message, it disburses the loan to the borrower.
When nirav modi did not repay the first Rs 800 crore, the bank ought to have stepped in and booked a default by the group company instead of that more amount of Lou's were granted by the two employees who were allegedly part of the scam to offset the payments. This continue until two weeks before the whole scene came into limelight.
Mistake From Bank side
No scam is committed until there is some mistake from the sufferer side. Here also some mistakes are done by Punjab National Bank .
PNB sources say the bank isn’t fully integrated on a Core Banking System (CBS) which could have immediately detected the discrepancy. Gartner defines CBS as a back-end system that processes daily banking transactions, posting updates to accounts and other financial records. CBS would have detected the unusual transactions or activity in the account much before.
The management of Punjab National Bank did't work well as a result of which the scam was committed. The bank has an internal process of rotating the top level employees regularly within a period of few months But the two accused were in the same role in the same branch for seven years. The question rises here is that in this long span of time so many employees and managers changed, how did they managed to bypass the process.
Now What...??
Till the date it is known that RBI has instructed PNB to pay other banks for the loans disbursed to Modi.Other banks will have to set aside money from their profits till the time PNB coughs up the money, and when it does pay up, PNB’s books will then have to show the amount as loss.
Source : - https://qz.com/1208266/the-1-8-billion-punjab-national-bank-nirav-modi-fraud-explained/
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