For the first time, the public sector Oriental Bank of Commerce (OBC) has come clean on its loan exposure to the absconding diamantaires Nirav Modi and his uncle Mehul C. Choksi, here on Friday.
The development comes ahead of the OBC’s upcoming merger with the Punjab National Bank (PNB) which – in February 2018 – had admitted to a massive fraud perpetrated by Nirav Modi and Choksi running into over Rs 13,500 crore, sending the entire banking industry in a spin.
The OBC has now issued notices declaring the duo and their companies as ‘Willful Defaulters’ for varying loan amounts, totaling to around Rs 289 crore, at their Large Corporate Branch, Cuffe Parade, Mumbai.
Nirav Modi’s companies Firestar International Pvt. Ltd. and Fire Star Diamond International Pvt. Ltd. failed to repay the OBC’s loans of Rs 60.41 crore and Rs 32.25 crore, respectively.
Similarly, Choksi’s companies Gitanjali Gems Ltd. and Nakashatra World Ltd. have defaulted on OBC’s loans worth a total of Rs 136.45 crore and Rs 59.53 crore, respectively.
Days after the scam erupted in February 2018 and it dawned that Nirav Modi and Choksi, along with other accused family members, had sneaked out of the country, the OBC promptly declared their accounts as ‘NPAs’ on March 21, 2018.