this slide share gives you deep knowledge about scam done by nirav modi and explains whole work and process of scam done

1. NIRAV MODI MAHAGHOTALA
BY KRISHNA SINGHANIA

3. WHO IS NIRAV MODI ???
• Nirav Modi borned in Gujarat but lived in
Belgium .
• Diamond jewellery business .
• 2017 FORBES Magazine declared him as 57th
richest person in India .

4. BELGIUM
MUMBAI

5. STARTED IN 1999
AFTER FEW YEARS

6. PUNJAB NATIONAL BANK
• PNB – India Multinational banking and
financial service company .
• Founded :- 1894
• Headquarter :- New Delhi
• Total Assets :- 774,949 crore (US $110 billion)
• Owner :- Govt. of India
INDIA’S SECOND LARGEST BANK

7. NORMAL IMPORT PROCEDURE
(WITHOUT LOAN)
EXPORTER OF
HONG KONG
IMPORTER OF
INDIA
EXPORT
PAYMENT

8. NORMAL IMPORT PROCEDURE-WITH
LOAN
EXPORTER OF
HONG KONG
IMPORTER OF
INDIA
EXPORT
BUYERS
CREDIT
FOREIGN
BANK
BUSINESS
MAKES PAYMENT

9. WITH LOAN- DETAILED PROCEDURE
EXPORTER OF
HONG KONG
IMPORTER OF
INDIA
INVOICE
AND OTHER
DOCUMENTS
SECURITY
DEPOSIT &
INVOICE
FOREIGN BANK
MAKES PAYMENT
LOU
ORDER
INVOICE
AND OTHER
DOCUMENTS

10. WHAT IS LOU
• Giving guarantee of principal + interest to
foreign bank that if Indian borrower defaults,
PNB will act as a guarantor to pay the pricipal +
interest to foreign bank .
• This LOU is given against commission from
borrower .
FOREIGN BANK
LOU

11. INTERBANK COMMUNICATION-SWIFT
HONG KONG
LOU
Through swift giving
instruction to give buyers
credit to Indian borrower
SWIFT :- Society for World wide Interbank Financial Telecommunication
HONG KONG
MESSAGE

12. NOSTRO ACCOUNT
HONG KONG
MESSAGE THROUGH SWIFT
FUND TRANSFER TO
INDIAN BANK HAVING ACCOUNT
IN FOREIGN BANK

13. NORMAL FLOW OF TRANSACTIONS
EXPORTER OF
HONG KONG
IMPORTER OF
INDIA
DELIVERY
PAYMENT
HONG KONG
SWIFT
MESSAGE
AND LOU
Security
deposits and
invoice
Principal+
interest
Principal+
interest

14. INVOLVEMENT OF PNB STAFF
BUYERS CREDIT
BRANDY HOUSE BRANCH
LOU
WITHOUT
SECURITY
DEPOSIT
HONG KONG
TO
2 PNB OFFICIALS LOU AMOUNTING TO 11,000cr

15. FLOW OF TRANSACTION IN PNB CASE
EXPORTER OF
HONG KONG
IMPORTER OF
INDIA
DELIVERY
PAYMENT
Security
deposits and
invoice
Principal+
interest
HONG KONG
SWIFT
MESSAGE
AND LOU Principal+
interest

16. CORE BANKING SYSTEM (CBS)
BANK
ISSUE
LOU
ENTRY
IN CBS
ISSUE
LOU
WITHOUT
ENTRY IN
CBS
OFFICIALS
OFFICIALS
Through SWIFT
giving
instruction to
HONG KONG ISSUES
BUYER
CREDIT TO

17. SWIFT & CORE BANKING SYSTEM
SWIFT
NORMALLY LINKED TO
CORE BANKING SYSTEM
IN PNB’S CASE
SWIFT
CORE BANKING SYSTEM
NOT LINKED TO

18. REASONS FOR SCAM
SWIFT
CORE BANKING SYSTEM
NOT LINKED TO
CORE BANKING SYSTEM
NO ENTRY IN
LOU
Could not track
what was
happening actually.

19. JAN 2018
• Nirav Modi’s companies
Diamond RUS request for buyer’s
Solar export without security
Stellar diamonds deposits .
BUT OUT OF 2 BANK OFFICIALS 1 WAS
RETIRED AND NEW DEPUTY MANAGER WAS
APPOINTED .

20. AFTER NEW DEPUTY MANAGER’S APPOINTMENT
DEPUTY
MANAGER
INSTRUCTED
TO DEPOSIT SECURITY
DEPOSIT
They had never
deposited such
collateral
security before .
Nirav Modi
company

21. NEW DEPUTY MANAGER’S
INVESTIGATION
DEPUTY
MANAGER
Checked records of PNB - CBS
No such entry
was found.DETAILED
INVESTIGATION

22. ULTIMATE LIABILITIES
• Nirav Modi companies have not repaid such
buyer’s credit liabilities and thus, these all
liabilities are now on PNB, since PNB has issued
LOU to foreign banks for giving Nirav Modi’s
companies .
• PNB has no source of direct recovery as it has
issued these LOUs without security deposit .

23. CBI CASE
NIRAV MODI AND HIS WIFE , NISHAL MODI
(brother) , MEHUL CHOWKSI (uncle)

24. AFTER SCAM
CONTRACT
SHARE VALUE
FALLEN BY 10% SHARE PRICES
STARTED TO
FALL

25. • Gitanjali group of companies has been raided at
20 different locations .
• Nirav Modi went out of India on 1st Jan 2018
and later his wife, brother and uncle also went
out of India .

26. ENFORCEMENT DIRECTORATE
RAID AT HOUSE
AND OTHER 17
OUTLETS
ASSETS WORTH
5100 WERE SEIZED

27. THANK YOU