CBI to Probe Another Rs 5,280 Crore Loan Given to Mehul Choksi by ICICI Bank-led Consortium

New Delhi: The Central Bureau of Investigation is probing another loan of Rs 5,280 crore extended by a consortium of 31 banks led by ICICI Bank to the companies of absconding billionaire jeweller Mehul Choksi, officials said on Wednesday.

The probe is different from the Punjab National Bank (PNB) fraud already unearthed, the investigative agency said. They said whether a fresh FIR will be registered in the case or the ambit of an existing FIR will be expanded, will be decided before proceeding with action in the matter. The agency in February had examined a senior ICICI Bank functionary too, they said.

However, the sleuths said that for the time being, their focus would remain on the fraudulent LoUs worth Rs 13,000 crore given to Choksi’s and Nirav Modi’s companies. The loan of Rs 5,280 crore to the companies of Choksi in 2016 will come under its probe at a later stage, they said.

The scanner on the loan comes after ICICI Bank MD and CEO Chanda Kochhar and Axis Bank MD Shikha Sharma were summoned by Serious Fraud Investigation Office (SFIO) on March 6 while investigating the loan given to the Gitanjali Group.

Meanwhile, the agency questioned three officials from foreign branches of Indian banks, which had given credit facilities to the companies of absconding billionaire jewellers, on the basis of Letters of Undertaking (LoUs) issued by Punjab National Bank's Brady House branch in Mumbai.

Two officials of Canara Bank's branch in Bahrain, including its branch manager, and an official of Bank of India's branch in Antwerp in Belgium were questioned by a CBI team in Mumbai, they said.

It is alleged that Choksi and Modi got LoUs and Foreign Letters of Credit (FLCs) of USD 2 billion issued in favour of foreign branches of Indian banks based on fraudulent claims. The accused PNB officials did not enter the instructions for these LoUs in their internal software to avoid scrutiny.

They were sent through an international messaging system for banking called SWIFT, which is used to pass instructions among banks globally to transfer funds. An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.

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