₹2,434 crore loan fraud with PNB: Allegations against two Shree Group companies – Equipment and Infrastructure Finance; The bank said- recovery has been done

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PNB Reports ₹2,434 Crore Loan Fraud By Former SREI Promoters; Full Recovery And Provisioning Done

Mumbai38 minutes ago

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Both the companies had a total debt of Rs 32,700 crore, due to non-payment of which action was taken under the Insolvency and Bankruptcy Code (IBC).

After Nirav Modi and Mehul Choksi, now two finance companies have committed loan fraud with Punjab National Bank (PNB). Public Sector Bank (PNB) said that the former promoters of two Shree Group companies Shree (SREI) Equipment Finance Limited (SEFL) and Shree Infrastructure Finance Limited (SIFL) have defrauded it of Rs 2,434 crore.

PNB has informed this to the banking regulator Reserve Bank (RBI). In a regulatory filing on Friday, the bank said that the former promoters of SEFL have committed fraud of Rs 1,240.94 crore and SIFL of Rs 1,193.06 crore.

The bank has recovered the entire loan

However, the bank has clarified in the filing that this will not have any impact on its finances as it has already made 100% provisioning for the entire outstanding amount. That means full compensation has been made.

The bank informed about the regulatory filing fraud and recovery of those funds on Friday, December 26.

Both the companies had a debt of Rs 32,700 crore.

These two companies had a total debt of Rs 32,700 crore, due to non-payment of which action was taken against the companies under the Insolvency and Bankruptcy Code (IBC). After this, in December 2023, they were acquired by the new promoter National Asset Reconstruction Company Limited (NARCL).

In October 2021, the Reserve Bank had removed the boards of SIFL and its subsidiary SEFL due to allegations of mismanagement. Earlier the control of both these companies was with the Kanodia family of Kolkata.

After removing the board, RBI had started the IBC process against them. Shree Group was started in 1989 as an asset financing NBFC, with Hemant Kanodia as the main face of SIFL.

PNB had a profit of Rs 4,904 crore in the September quarter.

PNB has registered a 14% increase in its standalone net profit in the September quarter of the current financial year 2025-26. This has increased to Rs 4,904 crore as compared to Rs 4,303 crore last year. The bank’s operating profit in the July-September quarter stood at Rs 7,227 crore, while in the April-September half it stood at Rs 14,308 crore. On annual basis, growth of 5.46% and 6.51% has been observed.

There was a fraud of Rs 11 thousand crore in 2011

Before this, the biggest fraud had happened with the bank in the year 2011. In this, the two main accused Nirav Modi and Mehul Choksi are currently out of the country and preparations are underway to bring them to India. This was one of the biggest frauds in Indian banking history.

Diamond trader Nirav Modi, his maternal uncle and Gitanjali Gems owner Mehul Choksi got fake Letters of Undertaking (LoUs) issued by PNB’s Brady House branch in Mumbai.

With the help of these LoUs, they took credit from foreign banks, without giving any security or collateral. Due to the connivance of some officials of the bank, these transactions were not recorded in the core banking system.

In January 2018, PNB filed a complaint with the CBI, naming Nirav Modi, his wife Ami Modi, brother Nishal Modi and Mehul Choksi as accused. Companies of both, like Diamond R US, Solar Export, Stellar Diamond and Gitanjali Gems were involved in this.

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1. PNB scam accused Mehul Choksi arrested in Belgium: Action after India’s extradition appeal; Choksi can ask for bail citing health

2. The process of bringing Choksi to India starts from September 15: CBI-Foreign Ministry will present evidence in Belgian court, if not, release is also possible.

3. Nirav Modi’s brother arrested in America: Nihal accused of destroying evidence of PNB scam, ED-CBI had appealed for extradition

4. Bail plea of fugitive Nirav Modi rejected in London: CBI opposed the arguments of the accused; There is an allegation of fraud of ₹ 14500 crore from PNB.

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