Page 6 - Banking Finance August 2019

BANK UPDATE

PNB reports over Rs. 4 Swiss bank accounts of Nirav, sister seized
3,800-cr fraud by Bhushan Fugitive diamantaire Nirav Modi and his sister’s four Swiss bank accounts have
been "frozen" by authorities in Switzerland
Power as part of the criminal money laundering in-
Punjab National Bank has recently vestigation being conducted against them in
stated that India, as per the information from official
it has de- sources.
tected a They said currently the accounts have depos-
fraud of its worth Rs 283.16 crore and they have
more than been frozen on the request of the Enforce-
Rs 3,800 crore by Bhushan Power & ment Directorate (ED) after it informed Switzerland authorities that the money
Steel Ltd (BPSL) and has reported it kept in them are "proceeds of crime" of a bank fraud perpetrated by the duo.
to the RBI.
The official sources further informed that the ED requested the Swiss authori-
PNB said Bhushan Power & Steel Ltd ties sometime back and sent an official request under the criminal provisions of
misappropriated bank funds and ma- the Prevention of Money Laundering Act (PMLA).
nipulated its books of accounts in or-
While the accounts of Nirav Modi have deposits of $3,74,11,596, the accounts
der to raise funds from banks.
in the name of his sister Purvi Modi has deposits of GBP 27,38,136.
"On the basis of forensic audit inves-
tigation findings and CBI filing FIR, on The said that this totals around Rs 283.16 crore, they said. The central probe
suo moto basis, against the company agency is likely to now make a move for the attachment of these bank accounts
and its directors, alleging diversion of under the PMLA.
funds from banking system, a fraud The ED and CBI are probing Nirav Modi, his uncle Mehul Choksi and others for
of Rs 3,805.15 crore is being re- alleged money laundering and corruption to defraud the Brady House branch
ported by bank to RBI," PNB said in of the PNB in Mumbai to the tune of over Rs 13,000 crore.
a regulatory filing.
Interest rate on small savings schemes lowered by 0.1%
"It has been observed that the com- The Finance Ministry has recently informed that interest rates for small savings
pany has misappropriated bank funds, schemes will be lowered by 10 basis points for July-
manipulated books of accounts to
September quarter of the ongoing financial year.
raise funds from consortium lender
banks. At present, the case is at NCLT Among others, schemes which will fetch lower in-
terest are Kisan Vikas Patra (KVP), Public Providend
which is in advance stage and the
Fund (PPF), barring interest on savings deposits
Bank expects good recovery in the that has been retained at 4%.
account," PNB added.
“On the basis of the decision of the government, interest rates for small savings
PNB further stated the bank has al- schemes are to be notified on a quarterly basis," the Finance Ministry said in a
ready made provisions amounting to
statement.
Rs 1,932.47 crore, as per prescribed
prudential norms, for the BPSL ac- The decision to lowering interest rates on small savings scheme comes at the
count. backdrop of when the banking regulator has slashed benchmark rates thrice by
cumulative 75 basis points since January.
PNB said its domestic exposure to
Bhushan Power & Steel Ltd (BPSL) PPF and National Savings Certificate (NSC) will yield 7.9% annual interest from
stood at Rs 3,191.51 crore and over- the earlier 8%. KVP will fetch 7.6% with maturity of 113 months as compared
seas exposure of USD 49.71 million with 7.7% with maturity of 112 months.
(approx Rs 345.74 crore) at Dubai Compared with 8.5%, a lower return of 8.4% will be fetched by the girl child
branch and USD 38.51 million savings scheme Sukanya Samriddhi Account. Similarly, term deposits of 1-3 years
(approx. Rs.267.90 crore) at Hong will fetch interest rate of 6.9%, to be paid quarterly, while the five-year quar-
Kong branch. terly pegged at 7.7% and for recurring 7.2% from existing rate of 7.3%.

6 | 2019 | AUGUST | BANKING FINANCE