PPT ON PNB SCAM

SAHIL SINGHAL{3262}
Submitted By TANMAY RAHEJA{3246}
GAURANG SRIVASTAVA{3265}
SHIVANI TOMAR{3292}

Submitted TO Dr. Renu sobti

 PNB Scam

“Shining Diamonds
took Away
PNB’s shine…”
 Who is Nirav Modi???
 Born in Gujarat, brought up in Belgium.
 According to the 2017 Forbes magazine he was
the.57th Richest Person in India.
 He came to Mumbai to learn diamond business from
his uncle Mihul Choksi.
 He started his own company Firestone Business in
1999 and later a company with his own name.
 Famous Bolllywood celebrity Priyanka Chopra
became his brand ambassador.
 Punjab National Bank
PNB is an Indian Multinational Banking & financial ….Services
company.
Founded in 1894.
Headquarter is in New Delhi.
Total Assets worth 6,66,390 CRORE.
Owned by Government of INDIA.
It is the Second largest bank of India after SBI.
TRADING THROUGH BUYER’S CREDIT

Exporter from Importer from

Hong Kong India
Order
Invoice & other document

Payment Security Invoice &

deposit other document

r of ing
e tt e r ta k
L de
Un

Principal Entry in
+ Interest CBS
MISUSE OF BUYER’S
CREDIT BY NIRAV MODI

deputy manager. Issuing letter of

officials including a undertaking (LoU)
Colluding with bank without any security
deposit.

FRAUD
Cooking the books by of Rs. 11000 CRORES.
not entering LoU didn’t pay a total amount
transaction and swift Since 2011 Nirav Modi
message in Core
Banking Solution.
DETECTION OF FRAUD BY PNB
New deputy Modi assured the
Retirement of PNB’s manager that they have
manager asked for
deputy manager who transacted with PNB
colluded with Modi. collateral to issue without collateral many
LoU. times in the past

After detailed After not finding any record

Nirav Modi ,his wife, of Modi’s previous
investigation by
Mehul choksi and transaction in the core
PNB, the fraud was
Nishal modi ran banking solution, the
detected and reported manager reported the
abroad
to CBI. aberration to the bank.

Raid at 17 different
places and assets
worth 5100 crore
seized
FALIURE OF CORPORATE
GOVERNANCE AT PNB
 According to the rules of corporate governance in India a company’s board should
consist of 50 percent Non-executive directors (NED) or when a company is headed
by a NED, 1/3rd members should be NEDs.
 The PNB board is compromised of 11 members of whom only one is a part-
timer(supposedly, the NED). The bank does not even clarify the category in which
these directors fall.
 The PNB board is headed by a NED and hence, only 1/3rd members need to be
NEDs. But a cursory look will show that two directors are government nominees
who according to SEBI cannot be considered NED and thus, PNB failed to meet
the NED requirements.
 The Rules also call for inclusion of an independent audit committee which PNB
blatantly ignored.
 Another glaring disregard for requirements is that the audit committee should be
headed by a person having accounting and financial expertise which is not the
case in PNB.
 Since so many years didn’t PNB check whether it’s NOSTRO account and SWIFT
is linked with CBS or not?
Impact
THANK YOU