Is Nirav Modi #PNBScam the tip of the iceberg?

The #PNBScam threatens to rip the face off a cool bank defrauding scheme...


TV Commentator, Auditor and Author M R Venkatesh discusses with PGurus the Rs. 11,000 cr ($2 billion) scam that happened at India’s second largest Public Sector Bank, the Punjab National Bank. Who were the players, schemers and so on… A must watch!

Excellent sources of information:
1. How the USD 1771.69 Mio Import Ponzi Scam at PNB UnfoldedFeb 16,2018, Capitalmind.in
2. In the name of GOD by Ravi Subramanian, Amazon.in

Team PGurus

13 COMMENTS

  1. One of the main reasons for such scams continuing is that the CA firms are doing multiple jobs along with AUDIT- such as helping a company to prepare balance sheet, Tax advice and representing companies before the tax authorities, incorporating (shell) companies, consulting and so on. In the process the integrity of Audit function of the firms gets badly compromised. (Take case of Satyam) After all, how can you audit honestly a company from which you are receiving fat fees on account of other services. CA institute of India should formulate a regulation where an Auditing CA firm is debarred from performing other roles for any other company. Then only these specialist Audit CA firms will do justice to the audit job and catch the frauds.

  2. As we do not know the exact amount of LOUs issued by the corrupt officers of the PNB, we have to ask the foreign branches of our banks which has discounted the LOUs the particulars of amount credited to the Nostro account/Nirav group companies since 2011. Secondly since the amount is totally siphoned off we should get the list of beneficiaries to whom the amount is credited. The Income tax dept can form a special team and report in 7days and not 7 years.
    Reconciliation of the Nostro account maintained by an expert team no foreign audit firm please.
    All the LC/LOus and BG opened by any bank in India above Rs.10 crore and discounted by another bank in India or abroad which is remaining outstanding but not due or remaining should be sent to Special Cell to be formed in RBI for effective monitoring and to determine the extent of bug in the system. RBI in turn should confirm with the respective bank at the level of DGM and above.
    All the banks should get their non funded exposure linked to the CBS system with joint custody of officer and branch manager for opening of Non funded Limit/BG/LOU etc

  3. Mr M R Venaktesh, I follow your comments regularly in T V channels. I want to ask you whether as an Auditor do you ask, whether Banks Branch managers go through the copy of the swift messages sent daily at the end of the day. In those days messages were sent by Telex and it has a carbon copy of the messages sent daily which was read by the branch head at the end of the day. I am sure that swift messages will also have copy.If this was done by PNBs branch head the farud could have been arrested in 2011 itself. But the PNB CMD says that they have detected the fraud. It is because the guy from Nirav Maodis office came for the similar favor which he has been getting for several years from the Shetty guy thinking that the next officer will also oblige. This is like in Hindi there is a saying “A Bhale , Muje maro”.If he had not turned up the scam would not come to light. MD proudly says they have unearthed this scam. What was he doing for so many years with the copy of the swift messages if available? Sleeping over it?

  4. This is sickening to note that everybody is making loud noise about the fiasco in PNB.
    As a retired bank official and having worked as Br.manager of a large branch and worked as second man in the Audit & Inspection Dept of the premier bank in India , I submit my opinion as under.
    Thisith the presumption that the fradulant issue of issuing Letter Of Understanding is since 2011 .
    In the banks , such issue of LoUs are to be done jointly by 2 officials. One will be the desk official, in this case Mr.Gokulnath- Dy Manager – and by the Division Head , presumably an AGM. If both the functionaries collude , as is stated in the press & media,it is difficult to find out even in regular br.audit.The fradulant establishment and issue of LoUs will come to light in two ways. One is by the other staff members working at the branch. Second possibility is when such a LoU is invoked by the branches of our banks in foreign countries who had extended finance based on such fradulant LoUs. Both do not seem to have happened till date. That is , the perpetrators have managed very efficiently.
    Then , how did this issue come out ?
    The Deputy manager Mr.Gokulnath had retired and a new person had occupied the desk.
    The company that had perfected this modus operandi took it for granted and approached the new nut character for establishment of such LoU as a matter of right claiming to be the procedure and practice extended by the branch and enjoyed by the client.
    Here I find that the bank’s desk officer and the clients staff are new.
    Now the new broom i.e. the Desk Official ascertained the details from the company’s staff and reported to his controller , probably in Dec.2017 0r Jan.2018.
    In the last 8 years , since 2011 to 2017 , many functionaries in the bank had changed places and the information was a shock and started digging further and reported the matter .
    Now, everybody is talking about a fraud amounting to Rs.11,500 crore or thereabout.
    This fascinating figure may not be the amount of loss to the bank, banks or the system.
    Now , this is for the bank to tell the public in general as to how many such LoUs stand invoked and the amount devolved.
    I wish the bank to come out with details of [ 1.Number of LoUs invoked & 2.Total amount devolved on the bank ]and shut the foul mouthed press and media , who are ever hungry for sensationalising news .The ill informed and not so competent politicians also should stop blaming each other.

  5. To the Modi supporters, all Indians are not fools. Dr.Swamy, please stand up for your fellow citizens.
    *Neeshal Modi* is *Nirav Modi’s* Real Brother and they are partners in Business.
    .
    *Neeshal* is married to *Isheta.*
    .
    *Isheta* is the *ONLY* daughter of *Dipti Salgaocar.*
    .
    *Dipti* is the Real Sister of *Mukesh* and *Anil Ambani.*
    .
    NOW IT DOESN’T REQUIRE A *SHERLOCK HOLMES* TO KNOW HOW THE *11,400 CRORES* SCAM HAPPENED AND WHY IS ONLY *NIRAV MODI’S* NAME BEING SPOKEN AND NOBODY TALKING ABOUT *NEESHAL MODI.*

  6. This fraud has nothing to do with UPA or NDA. They were exploiting a hole existed in the system. Plugging such loopholes is what requires to be done immediately. Ofcourse being close to influential politicians might have made it easier . Other loopholes still exists
    1. Bank guarantees are fraudulently issued without recording in the system. They are just agreements executed on stamp papers. There in no procedure to verify a guarantee other than contacting the same branch which issued it. There could be guarantees worth billions in circulation
    2.Inter bank deposits are another way to divert funds. need a little explanation. Bank A will have some excess funds and parks it with bank B for short term. Amount is not accounted as deposits at bank B but credited to the account of a third party C. A bogus receipt is kept with bank A to fool auditors.
    A forensic audit of guarantees and interbank deposits has to be done immediatly

    • If Kangress thinks it can fool the Indian citizens easily, I can say it is a big Mistake, public will teach lesson. Enough is enough.

  7. There is a vital topic forensic accounting and fraud management, the history started with Satyam and in Bangladesh Bric bank scam,
    It has spread like virus we have no compliance nor regulatory control, nexus is big and politicians involved.

  8. Just a question to all these Congressi spinners.
    Why these corrupt people are running away from the country? Because of Congress taking actions against them or Modi’s action hitting them hard? I think congresi corrupts will never answer rather than shoot and scoot so better is arestong culprits and hang them within 2018. No mercy even if it Sonia Rahul Chidambaram Abhisek manu singhvi or any one. In this case little brutality is needed by this govt.

  9. Kindly tell to the world that all the LOUs prepared between 2015 to 2017 and in that period, the modi govt. in place, yet you say and bjp says it all started in 2011. How are you saying this even after CBI FIR, which mentions 2017. Do you mean to say there is no role played in BJP rule? Why cover-up operation to save BJP. If your team is really interested to bring to the fore the huge corruption in banking sector, please forget about the BJP/congress and tell the world without your party politics about what happened in 2017 and why Mr.Nirav and his family, mallya,lalit modi all went abroad in modi govt. period, which claims to correct the system, which was collapsed in UPA period. One must be bold enough to say the truth.

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