PNB Fraud: Mehul Choksi defaulted on loan of Rs 121 crore, says Jammu & Kashmir Bank

The Nirav Modi scam has touched even Jammu & Kashmir, with the state’s premier bank saying that the jeweller’s maternal uncle and business partner Mehul Choksi defaulted on a Rs 121-crore loan.

Jammu & Kashmir Bank’s branch in Fort, Mumbai, granted the loan to Choksi’s Gitanjali GemsBSE -4.92 % in 2012 and he was later declared a defaulter. 

Choksi is currently out of the country.“The loan of Rs 121crore was provided to Gitanjali from the Mumbai branch. The amount has now risen to Rs 152 crore, including interest,” a senior official of the bank told ET. During the raids against Choksi, the Enforcement Directorate also searched the Gitanjali Gems showroom in Udhampur district of Jammu last week and seized gold jewellery and diamonds worth Rs 2.5 crore. The lender hasn’t taken any action so far against the defaulter or the bank officials who sanctioned the  the loan to Gitanjali Gems.
Read also: PNB fraud:Nirav Modi connection with Jammu & Kashmir

“We are collecting all details of this case. However, no official from that period has been under investigation or faced any enquiry till now,” the bank official said. After PNB fraud, the Indian Bank’s Association also delayed it’s meeting with all bank associations and unions which was scheduled on Wednesday.

J&K Bank came under criticism from opposition legislators last month for its defaulters, non-performing assets and weakening financial structure. The opposition had demanded a special debate to discuss issues related to the bank.

The bank’s NPAs have increased to above Rs 5,000 crore, said senior opposition legislator Muhammad Yousuf Tarigami of CPM. He said the bank’s many backdoor appointments have made it ‘susceptible to fraud and vulnerable to downfall.’ J&K Bank’s net NPAs narrowed to Rs 2,487.6 crore, or 4.29% of net advances, in the three months ended December from Rs 2,699.1 crore, or 5.99%, a year earlier, the lender said.

Originally posted on economictimes.com