TIL Desk/Business/New Delhi/ As investigations into the Rs 11,400 crore scam at PNB gather momentum, officials at overseas branches of other banks, where the fraudulently issued Letter of Undertakings (LoUs) were encashed, are under scanner, sources said. Officials of Hong Kong branches of Indian lenders including Allahabad Bank, State Bank of India (SBI), Union Bank, UCO Bank and Axis Bank are part of the entire fraud which continued for 7 years.
As per the guidelines, the tenure for the encashment of LoUs for the jems and jewellery sector is usually of 90 days and not 365 days — the maturity period of most of the LoUs linked with the PNB fraud, sources said, adding that the deviation from the usual practice should have raised alarm in the minds of officials working at the Hong Kong branch of other lenders.
But surprisingly this did not happen till last month when PNB refused to honour LoU fraudulently issued by some of the staff at its Brady House branch in Mumbai, sources said. Had someone raised alarm earlier, the quantum of fraud could have been lower, sources said, adding that it is like alert citizen informing police about some nefarious activity to authorities for the further action.
As many as 11 Indian banks have operations in Hong Kong. Branches of Allahabad Bank, UCO Bank, Union Bank of India, Axis Bank, SBI, Bank of India, Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank, and Indian Overseas Bank are present in the city state.
