Nil exposure to entities involved in jewellery sector fraud: Yes Bank

Mumbai Feb 16 (IANS) Following the recent developments in the Indian banking sector the private sector Yes Bank on Friday said it has "nil exposure" to the entities that were associated with the fraud in the gems and jewellery sector.

The $1.8 billion fraud was detected by the second largest public sector bank Punjab National Bank (PNB) in one of its branches in Mumbai on February 14 for which billionaire diamond trader Nirav Modi was accused along with his wife Ami brother Nishal Modi and uncle Mehul Choksi chairman Geetanjali Group.

"Yes Bank would like to confirm that it has nil exposure to the entities or affiliates mentioned in the media reports on the subject specific fraud in the gems and jewellery sector " the bank said in a regulatory filing to the BSE.

Late on Thursday evening state-run Union Bank of India informed the BSE that it has an outstanding exposure of about $300 million in the fraud detected by PNB; however the former was also confident of receiving the payment.

The Union Bank was among other banks that were said to have offered credit based on Letters of Undertakings (LoUs) issued by PNB.

"The outstanding exposure related to the incident is approximately $300 million and the bank is fully secured by LoU/LC/other documents and fully confident to receive the payment " it said in a regulatory filing.

An LoU is in effect a guarantee issued by one bank to the branches of other banks based on which foreign branches offer credit to buyers.

The lender said that through its foreign branches it has been taking exposure with PNB as counter party under various LoUs issued through authenticated SWIFT.

--IANS
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