The PNB branch of South Mumbai is situated just near the Mumbai Stock Exchange and RBI. The branch with a splendid colonial structure is now in the middle of a fraud case related to the celebrity designer Nirav Modi’s uncle, a billionaire jeweler. This incident has traumatized the confidence of government state banks that are accountable for nearly 70% banking assets of India.
As per the statements from government investigators and PNB executives, a middle-aged bank manager together with his junior subordinate, carried out fake transactions totaling an amount of $1.8 billion within the time period of 2011 to 2017.
The bank commented that it is still carrying on with the investigation on how this massive scam was possible and how did it remain undetected for such a long time. The financial records presented by former and current bank employees suggest a disturbing answer which is none of them paid attention.
The obvious failure of anybody to pay attention to the biggest scam in the banking history of India till date unveils decay in the financial industry that goes further than one lender, told Santosh Trivedi, ex senior manager of PNB who was handling audit and inspection in the country’s capital.
Trivedi added if this rot is not controlled at this phase, to the contentment of the worldwide community, it is hazardous for the India.
How did the 11,000 crore conspiracy go unnoticed is the question of the investigators. It is still not clear who will pay the costs. It was one-third of the total market capitalization of the bank when the forgery was reported. The amount is also equal to the profit of the bank multiplied by 8.5 for the fiscal year 2016–2017. The magnitude of this scam is massive and there is so much more to be unveiled yet. Only a little detail has been presented by PNB to other banks about the scam until now.