Infocomm Infocomm
24th NBFC100 TECH SUMMIT AWARDS 24th NBFC100 TECH SUMMIT AWARDS
BFSI AI SUMMIT BFSI AI SUMMIT
Home Regulators RBI SEBI TechINFRA Security Data Centre Cloud Services Government Reforms DBT Aadhaar GST Payments Payment Gateways ATM Point of Sale Payment Wallets Fintech Apps Banks Public Sector Private Sector Cooperative NBFCs Year Ender Magazine Magazine Subscription Articles Interviews Webinars Webinar Videos Video Series — Innovation Talk Upcoming Initiatives BFSI Events About Us Contact Us

PNB fraud: Other banks may have to share scam burden

PNB Fraud

PNB fraudThe Banks, who gave away money to jewellers Nirav Modi and Mehul Choksi on the basis of fraudulent guarantees issued by Punjab National Bank, will have to bear and share the liability if they were found  guilty of not following norms, a government official has revealed.

Speaking to a leading media organization on condition of anonymity, a senior finance ministry official said: “For now PNB will honour all commitments as and when they arise, but if the investigations reveal that there was impropriety on the part of other lenders they will have to share half the burden.”

Advertisementnbfc 100

As many as 30 banks, including some foreign lenders, are believed to have paid out funds to Modi, Choksi and their companies based on fraudulent letters of undertaking (LoUs) they allegedly made in collusion with PNB employees, according to a parliamentary committee.

PNB’s exposure in the scam is estimated at Rs 12,700 crore.

Advertisement24th Elets NBFC100 Tech Summit & Awards, Mumbai

“We don’t think there is any confusion on the payments. PNB has already committed to honour all bonafide LoUs,” the official said, adding that all public sector banks have already agreed to give a commitment to PNB that if the investigations reveal there has been some slippage on their end they will share the burden.

AdvertisementWorld AI Summit 2026 | Bengaluru

“The government will support all state-run lenders and for now we don’t see that the payments on behalf of those Lo-Us will endanger the bank (PNB),” he said.

AdvertisementElets BFSI AI Summit & Awards, Mumbai

The official also said whatever dispensation is allowed under the existing rules, PNB would get the same.

Elets The Banking and Finance Post Magazine has carved out a niche for itself in the crowded market with exclusive & unique content. Get in-depth insights on trend-setting innovations & transformation in the BFSI sector. Best offers for Print + Digital issues! Subscribe here➔ www.eletsonline.com/subscription/

Get a chance to meet the Who's who of the Banking & Finance industry. Join Us for Upcoming Events and explore business opportunities. Like us on Facebook, connect with us on LinkedIn and follow us on Twitter, Instagram.

Our Coverage of News

Federal Bank Appoints Virat Diwanji as Executive Director

Federal Bank has appointed Virat Diwanji as Executive Director, effective October 12, 2026, following approval from the Reserve… Read more →

NETSCOUT Launches nGenius Copilot to Accelerate Network Problem Solving with Conversational AI

October 1, 2026: NETSCOUT, a provider of network observability, AIOps, cybersecurity and DDoS protection solutions, has announced nGenius… Read more →

CUPI Targets Thousands of Businesses as B2B Expense Management Moves Towards Real-Time Payments

Bengaluru, September 30, 2026: CUPI, a digital business expense management platform, is targeting thousands of businesses over the… Read more →

AU Small Finance Bank Crosses 1,000 Microfinance Branches, Reaches 20 Lakh+ Customers

AU Small Finance Bank (AU SFB) has crossed the milestone of 1,000 Microfinance & Financial Inclusion Business (MFIB)… Read more →

Apple Pay Launches in India with Axis Bank Cards, Expands Contactless Payment Options

Apple has launched its Apple Pay payments service in India, allowing users to make contactless payments using compatible… Read more →

Melento Partners with Gnani AI to Bring Voice AI Agents to Global Enterprise Customers

Bengaluru-based enterprise agentic AI company Melento, formerly known as SignDesk, has announced a collaboration with frontier AI company… Read more →