Banks are close to reaching an accord on resolving the tussle over payments due to them by Punjab National Bank (PNB) against guarantees the latter issued to jewellers Nirav Modi and Mehul Choksi as well as their companies that are the subject of a Rs 13,000-crore fraud. While PNB has agreed to honour claims due by March-end, the payments will have conditions attached, said two senior officials with knowledge of the development. 

“While settling the dues, PNB will issue a letter to banks that they would be liable to make good the payment if the findings by the investigative authorities prove that there was malafide intent on the part of peer banks,” said one of them. “Once this is acknowledged by peer banks, PNB will make payments.” 

The banks made payments to certain entities on behalf of Modi, Choksi and their companies based on letters of undertaking (LoUs) issued by some PNB officials on fraudulent grounds. Getting the money, albeit with conditions attached, will come as a relief to lenders such as Union Bank of India, Allahabad Bank and UCO Bank. #casansaar (Source - Economic Times)