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IndusInd Bank exposure to Gitanjali Gems in ‘small’ 2-digits

PTI | New Delhi |

Private sector lender IndusInd Bank today said it has no direct or indirect credit exposures to Nirav Modi with regards to the LoUs issued by the scam-hit Punjab National Bank.

The bank, however, added that it has a “small, two-digit exposure” to Gitanjali Gems not linked to any LoUs”, without disclosing the exact amount.

Shares of the bank were trading 1 per cent higher at Rs 1,648.35 on BSE in morning trade.

“IndusInd Bank has no direct credit exposures to Nirav Modi nor any indirect credit exposures basis the LoUs issued by PNB. As regards Gitanjali Gems, the Bank has a small, two digit exposure, not linked to any LOUs,” the bank said in a regulatory filing.

Citing a Gem & Jewellery Export Promotion Council, India (GPEC) press statement, IndusInd Bank said there are stringent norms for bank finance to the gem and jewellery trade stipulated by the Reserve Bank of India and the Government of India.

“The present incident has taken place due to non-adherence of procedures and norms laid down and this stray incident is not expected to have any contagion effect on the overall gems and jewellery business,” it said.

On Wednesday last week, Punjab National Bank (PNB) said it detected a fraud in which diamond merchant Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from one its branches for overseas credit from other Indian lenders, and is being probed by CBI and Enforcement Directorate among other agencies.