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ICICI's Chanda Kochhar and Axis Bank's Shikha Sharma summoned in PNB scam

ICICI's Chanda Kochhar and Axis Bank's Shikha Sharma summoned in PNB scam

The case relates to the over Rs 12,700 crore Punjab National Bank alleged fraud by diamond merchant Nirav Modi and his uncle Mehul Choksi, owner of Gitanjali gems.

ICICI Bank said in a statement that it has no exposure to the Nirav Modi group of companies but noted, "We are working capital lenders to the Gitanjali group of companies along with several other banks in the consortium".

Sources said the two top bank officials would be questioned with regard to giving loan facility to the Gitanjali Group. The SFIO has summoned ICICI Bank Chief Chanda Kochhar and Axis Bank's Shikha Sharma for interrogation in connection with the big bank scam.

Earlier, a senior official of the ICICI Bank was summoned to the CBI office in Mumbai.

ICICI Bank led a consortium of 31 banks that lent money to the Gitanjali Group.

"The SFIO has today sought information on the accounts of the Nirav Modi and Gitanjali groups of companies". The ED has also traced some of the money being routed back to the banks for re-issuing letter of undertaking, or LoUs. On Tuesday, V Srinivasan, Deputy Managing Director of Axis Bank, visited the SFIO office in Mumbai. With Axis Bank and ICICI Bank complying with the SFIO summons, other lenders are likely to follow the suit. "The bank will submit all the required documents to the authorities", said an Axis Bank official.

SFIO and Enforcement Directorate (ED) are investigating 31 private and state-run banks that in a consortium gave working capital loans worth Rs5,280 crore to Choksi-controlled Gitanjali Gems Ltd starting 2009, a person with direct knowledge of the matter said. Since they had no pre-arranged credit limit, the branch official asked the companies to put down the full amount as collateral so the bank could issue LoUs to authorise the credit.

Choksi is facing allegations for getting letters with Nirav Modi Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) of Rs 12,636-crore issued in favor of the foreign branches of Indian banks based on the fraud claims on both.

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