The instruments are at the heart of the PNB fraud allegedly perpetrated by jewellers Modi, Choksi, their companies and bank officials.Under the circumstances, the recapitalisation of state-run banks may amount to throwing “good money after bad,” the standing committee on finance headed by Congress member M Veerappa Moily said.The government has embarked on a Rs 2.11 lakh crore recapitalisation programme for state-run banks, about half of which is already complete. This should happen “when the Letter of Undertaking is originated, as well as when its receipts and lending against it are notified to the LoU-issuing bank, by simply tagging the regulator,” it said. “A multi-agency probe has already been ordered and letters of request to 13 countries have been sent seeking details of properties, bank accounts of companies,” he said.These are being conducted by the Central Bureau of Investigation and the Enforcement Directorate among others. The Serious Fraud Investigation Office is examining 107 companies and seven limited liability partnerships linked to the Modi and Choksi groups with regard to the PNB fraud. The agency had earlier summoned executives of private sector banks such as ICICI Bank and Axis Bank in relation to the probe into Mehul Choksi's Gitanjali Gems.

Source: Economic Times March 12, 2018 00:59 UTC