Srinagar: The Jammu and Kashmir Bank on Thursday clarified its position regarding scam around diamond merchant Nirav Modi.
“The Jammu and Kashmir 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,” a spokesman of the bank in respect of news item appearing in some sections of press that the web of defaults diamond merchant Nirav Modi spun in the country’s banking system includes the Jammu and Kashmir bank from where his uncle, Mehul Choksi, decamped with a loan amount worth Rs 121 crore.
“The bank 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, the spokesman said. “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 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.
