PNB Scam : Enforcement Directorate seeks loan details from 16 Public Sector Banks

PNB Scam : Enforcement Directorate seeks loan details from 16 Public Sector Banks

Post Rs 11,400-crore Punjab National Bank (PNB) fraud, the Enforcement Directorate (ED) has asked 16 other Public Sector Banks (PSBs) to give details of of all the loans offered to Nirav Modi and Mehul Choksi.

The ED has also asked to furnish details like nature of the loans, and collateral offered against these loans. 

According to some estimates, total losses of these public sector banks could well swell up to over Rs 20,000 crore, if the ED finds out 'bending of norms' in their cases too.

The ED's decision to seek information on the loans offered to the duo seems to be motivated from the allegation that some banks offered huge loans to the duo's companies at just 12 per cent collateral, which put them at the risk of not being able to recover, in case of a PNB-like fraud. 

Many of these loans fall in special mention account of second category, meaning they were at the cusp of turning into non-performing assets, when these loans were offered.