Private sector lender IndusInd Bank clarified that it does not have any heavy exposure to the ongoing saga of fraud and crime involving unauthorized letters of comfort issued by an employee of Punjab National Bank.
“IndusInd Bank has no direct credit exposures to Nirav Modi nor any indirect credit exposures basis the LoUs issued by PNB,” said the private sector bank focused on corporate banking in India.
“As regards Gitanjali Gems, the bank has a small, two digit exposure, not linked to any LoUs,” it said. Two-digit exposure means an exposure of anywhere from Rs 10 to 99 cr.
The bank also dismissed concerns of a ‘contagion’ in the Gems & Jewelry industry due to the incident.
“As mentioned by the The Gem & Jewelry Export Promotion Council, India in their press release, there are stringent norms for Bank Finance to the Gem & Jewelry trade stipulated by Reserve Bank of India and the Government of India, the present incident has taken prace due to non-adherence of procedures and norms laid down and this stray incident is not expected to have any contagion effect on the overall Gems and Jewellery Business,” IndusInd Bank added.
Separately, the Punjab National Bank also issued a clarification on the matter, dismissing concerns over its solvency.
“PNB has enough assets to meet any liability which is decided as per law,” it said, commenting on rumors that it is ‘looking to sell assets. “However, realization of any specific asset would be decided at the time of need with the approval of the board,” it added.