The Central Bureau of Investigation said on Wednesday that the Punjab National Bank had filed two complaints against billionaire jewellery designer Nirav Modi and a jewellery company about fraudulent transactions worth Rs 10,000 crore, PTI quoted official sources as saying.
Investigative agencies have been informed about the latest fraud transactions, PNB said.
Banks are now looking at their systems and processes so that such frauds are not repeated, he said, adding all banks have been asked to present a status report as soon as possible.
PNB did not say if the cases were related.
PNB, which is the country's second-biggest state-run lender and fourth-biggest overall by assets, PNB stock price fell almost 7.8% after bank the detected the fraudulent transactions of worth Dollars 1,771.7 million in one of its Mumbai branch. Based on these transactions, said PNB, "other banks appear to have advanced money to these customers abroad".
PNB said it had reported the deals to law enforcement agencies and would evaluate later whether it faces any liability arising out of the transactions. "Based on these transactions other banks appear to have advanced money to these customers overseas", it added. None of the banks responded to requests for comment.
This may just be the tip of the iceberg, as the impact of the crime is likely to spill over to other banks, too. In a regulatory filing to stock exchanges on Wednesday, PNB said it has detected some fraudulent transactions with financial implication of $1.77 billion (about Rs 11,335 crore), and the matter has been referred to law enforcement agencies for recovery.
At the time PNB had said it was digging into records to see whether the hit was much deeper. The branch officials sought 100% cash margins for issuing letters of undertakings (LoUs) for raising buyers' credit.
Modi had allegedly cheated the bank to the tune of Rs 280.7 crore.
The fraudulent transactions are the equivalent of eight times the lender's 2017 net income of about 13.2-billion rupees ($206m), exchange filings show. This is the part of non-performing asset (NPA) reforms agenda.