‘Had no direct exposure to Nirav Modi companies’, JK Bank clarifies on Gitanjali Gems

Srinagar: The J&K Bank official spokesperson today clarified that the Bank had no direct exposure to the Nirav Modi Group companies and was not affected by any fraudulent Letters of Undertaking (LoU) issued by the Punjab National Bank.

The bank, added the spokesperson, however was having a business account of M/S Gitanjali Gems in its Fort Business Unit since 2012 wherein the bank had sanctioned a working capital loan of Rs 121 Cr under a consortium arrangement of 31 Banks led by ICICI Bank. J & K Bank’s share in the total loan facilities of Rs 5198 Cr by the consortium was 2.33%.

“In the wake of recent developments of the company with PNB, the consortium recently discussed and agreed that Banks may individually decide to recall the facilities and may also freeze all the accounts except for allowing few mandatory/statutory payments. Acting swiftly JK Bank has already initiated freeze on all debits in the account of Gitanjali Gems Limited and issued recall notice to the company which will be followed by legal action,” the spokesperson said.

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The spokesperson of the bank categorized any other information regarding the matter in some sections of media as factually incorrect.

Notably the bank had during its clean up and consolidation drive year and a half ago reckoned the account as a stressed account and consciously avoided additional exposure in the company.

Billionaire jeweler Mehul Choksi who is an accused in the Punjab National Bank fraud, has a loan of Rs 121 Cr with the Jammu and Kashmir Bank. The amount had been taken as a loan from the bank for ‘Gitanjali Gems’.

Talking to the Free Press Kashmir Sajad Bazaz, Head of Corporate Communications, JK Bank had said that the bank is contemplating legal action against Choksi.

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“The Chairman of JK Bank has already given a statement regarding this issue that legal action will be taken against the parties involved. This is not just our bank. Many bank have been defrauded. When we got to know about the Punjab National Bank’s case, we tallied the name of this big party with our books. And it hit! Now, whatever will be required to do individually as a bank, we will do. Rest, CBI has taken over the case. Arrests and investigations regarding the same are going on, on behalf of all the banks,” Bazaz said.

Quoting the Chairman of the bank, a report in the Daily Excelsior said that the bank had given a loan of Rs.121 crore to Choksi for his diamond showroom ‘Gitanjali Gems’ in Mumbai in the year 2012.

Now, over a period of six years, the amount has swelled up to Rs.152 crore.

Parvez Ahmad, the Chairman of the bank told Daily Excelsior that they are contemplating legal action against Mehul Choksi like other banks, which have also been defrauded by Choksi and Nirav Modi.


(With inputs from KNS)

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