Scam-hit Punjab National Bank on Thursday asked billionaire diamond jeweller Nirav Modi to come up with a concrete plan in a bid to settle the loss caused to the bank by fraudulent issuance of Letter of Undertakings (LoU) through one of its branches.

PNB said this in its response to a mail written by Nirav Modi, who allegedly cheated the bank of Rs. 11,400 crore in connivance with a few bank officials.

“You were getting LoUs issued illegally and in an unauthorised way through a few bank officials. At no stage such facilities were extended by our bank to your three partner firms,” sources said citing mail response sent by PNB General Manager (international banking division) Ashwini Vats to Nirav Modi.

When the illegal activities of Nirav Modi surfaced, the bank brought them to the notice of the law enforcement agencies as they apparently violated FEMA and anti-money laundering law, sources said.

“Your commitment and undertaking for sparing of the total liability was not backed by providing upfront amounts and timelines. However, should you have any concrete and implementable plan, do revert,” the mail said.

Nirav Modi in his letter to the bank had said that the over-zealousness on the part of the bank to deal with the issue destroyed his jewellery brand and also jeopardised his ability to clear the dues.

Meanwhile, the officials of CBI have claimed that the practice of illegally issuing LoUs and Foreign Letter of Credits (FLCs) and then rolling them over to favour Nirav Modi and Mehul Choksi groups started in 2008 and continued till these were discovered in January this year.

The illicit activities resulting in fraud of Rs 11,400 crore occurred under the nose of top Punjab National Bank officials but they claimed to be unaware of the scam.

The revelation came to the fore during questioning by CBI officials of Rajesh Jindal, who was holding the charge of Mumbai-based PNB’s Brady House Branch Head between August 2009 and May 2011, Gokul Nath Shetty, a retired Deputy Manager from the same branch who retired in May 2017, Bechu B. Tiwari (Chief Manager, in charge of Forex Department), Yashwant Joshi (Scale II manager of Forex Department) and Prafful Sawant (Scale I officer, export).

Jindal was arrested on Tuesday night after his day-long questioning in Mumbai. He was the 12th accused person to be arrested in the case so far. The CBI investigators had managed to get his custody till March 5 from the special CBI court on Wednesday.

(With inputs from agencies)