Q: Delineate Punjab National Bank Fraud Case ?

Ans: 

Punjab National Bank Fraud Case:


Nirav Modi's name revealed in the Punjab National Bank Fraud case as the 85th richest person in India. A few of the bank's representatives, according to the bank, collaborated with Modi and the firms associated with him to get guarantees or letters of undertaking from other international banks to help finance buyers' credit for the purpose of buying and selling diamonds. 

A Letter of Undertaking (LOU) is a bank guarantee given by one bank to another bank and was given on behalf of the customer for repayment of the loan. Mostly, the LOU is used when the person imports anything from a person, in another country.

Two bank employees issued Letters of Understanding to these companies falsely and unlawfully. Credit was then given to these companies based on these Letters.
PNB asserted that the funds allegedly raised for the purpose of purchasing and selling diamonds were not really used for that reason. PNB disclosed information to the stock exchange after discovering fraud of Rs 11,400 crores and it was the biggest scam of Indian Banking Industry at that time. 

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