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The US$1.8b Indian bank fraud that went unnoticed

The scam involving Punjab National Bank, India's second-largest state-run lender, has shaken confidence in the state banking sector

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Above: Indian Central Bureau of Investigation (CBI) officials escorting Gokulnath Shetty (centre, grey hair), the former deputy manager of the Punjab National Bank (PNB), into a special CBI court in Mumbai on Feb 17. Indian investigators have arrested three people who allegedly helped billionaire jeweller Nirav Modi obtain fake documents for overseas loans in one of the country's biggest bank scams. Investigators are looking into allegations that Modi and business partner Mehul Choksi were involved in defrauding PNB of 2.8 billion rupees. The CBI has also arrested Hemant Bhat, a business associate of Modi, and Manoj Kharat, another PNB official.

BT_20180220_PQFRAUD20B_3315503.jpg
Indian Central Bureau of Investigation (CBI) officials escorting Gokulnath Shetty, the former deputy manager of the Punjab National Bank (PNB), into a special CBI court in Mumbai on Feb 17. Indian investigators have arrested three people who allegedly helped billionaire jeweller Nirav Modi obtain fake documents for overseas loans in one of the country's biggest bank scams. Investigators are looking into allegations that Modi and business partner Mehul Choksi were involved in defrauding PNB of 2.8 billion rupees. The CBI has also arrested Hemant Bhat, a business associate of Modi, and Manoj Kharat, another PNB official.

BT_20180220_PQFRAUD20B_3315503.jpg
Indian Central Bureau of Investigation (CBI) officials escorting Gokulnath Shetty, the former deputy manager of the Punjab National Bank (PNB), into a special CBI court in Mumbai on Feb 17. Indian investigators have arrested three people who allegedly helped billionaire jeweller Nirav Modi obtain fake documents for overseas loans in one of the country's biggest bank scams. Investigators are looking into allegations that Modi and business partner Mehul Choksi were involved in defrauding PNB of 2.8 billion rupees. The CBI has also arrested Hemant Bhat, a business associate of Modi, and Manoj Kharat, another PNB official.

New Delhi

THE Punjab National Bank branch in south Mumbai sits just down the road from both the Bombay Stock Exchange and the Reserve Bank of India, at a physical centre of one of the world's fastest growing major economies.

The branch, clad in a stately colonial edifice, is now...

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