Concerned over a massive Rs 11,000 crore fraud at PNB remaining undetected for years, markets regulator Sebi may give a fresh push to its "on-hold" proposal to mandate listed firms to disclose all loan defaults within a day. 

While billionaire jewellery designer Nirav Modi, the alleged perpetrator of this fraud, is not directly linked to any listed company, his relative and business associate Mehul Choksi's Gitanjali Gems is a listed firm and has been involved in some other cases of suspected market manipulations. 

Sebi has already launched a probe into trading and disclosure related issues in the matter of Punjab National BankBSE -7.36 % (PNB) and Gitanjali Gems in connection with the biggest fraud in the Indian banking industry so far, allegedly perpetrated by absconding Modi. 

Ever since the fraud came to light last week, investors wealth has seen a massive erosion worth billions of dollars at PNB, Gitanjali Gems and several listed firms, including public sector banks with direct or indirect exposure to Modi. 

With an aim to help investors take an informed decision at the earliest in cases of loan default, Sebi had proposed to mandate listed companies to make immediate disclosure about their loan defaults. 

However, the proposal had to put "on-hold" apparently after reservations expressed by the banking industry that such a move can create a panic like situation. 
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"With the PNB fraud coming to light, it has become important to ensure timely disclosure of even a small loan default rather than the situation to balloon into a major crisis," a senior official said. 

Sebi is planning to make a fresh push on its earlier proposal, although it is open to make a constructive changes to the proposed framework, he added.  #casansaar (Source - PTI, Economic Times)