"It has been reported through a preliminary investigation that the suspected fraud has been carried out by the perpetrators in collusion with the staff of one of the our branches in Mumbai", PNB said in a letter sent to various banks, including those from the private and public sector as also to foreign lenders.
In its filing at the BSE, the PNB said the bank had detected some fraudulent and unauthorised transactions in a Mumbai branch. "Based on these transactions, other banks appear to have advanced money to these customers overseas", PNB said in a notice sent to the stock exchanges on February 14.The matter has been referred to law enforcement agencies. It further said Axis Bank has sold the majority of its exposure to State Bank of India.
It followed a complaint lodged by PNB on January 29 pertaining to an alleged cheating case of Rs 280 crore perpetrated by the four aforenamed persons in 2011.
This would be the bank's second complaint in almost a month, that it has indicated Modi's involvement in a scam. "The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land", the filing added.
No official comments were available from the agency on the issue or the nature of the transaction.
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It had also raided the residence of Modi, his brother Nishal, wife Ami and Mehul Chinubhai Choksi, all partners of Diamond R US, Solar Exports and Stellar Diamonds and two bank officials - Gokulnath Shetty (now retired) and Manoj Kharat, who were also named in the FIR as accused.
Letters of undertaking are typically issued by a bank giving some sort of a guarantee on behalf of a company.
Meanwhile, finance ministry tried to allay concerns over the fraud case and said it has "not gone out of control" and is taking action in this respect.
The bank sought 100 percent cash margins for issuing LoUs for raising buyers' credit, which was contested by the firms saying they had availed of the facility from as early as 2010. The bank said in a statement that "a few select account holders" appear to have been involved.