Gitanjali Gems defrauds Karnataka Bank of Rs 86.5 cr

Bengaluru March 29 (IANS) Privately-run Karnataka Bank Ltd has informed the Reserve Bank of India (RBI) that Gitanjali Gems of scam-hit Mehul Choksi had committed a Rs 86.5 crore fraud in the fund-based working capital.

"We have reported a fraud to the RBI amounting to Rs 86.47 crore in the fund-based working capital facilities extended to Gitanjali Gems Ltd on account of non-realisation of export bills and diversion of funds " said the Mangaluru-based bank in a regulatory filing on the BSE late on Wednesday night.

The scheduled commercial bank however clarified it does not have any Letter of Understanding (LoU) exposure in Choksi s company.

"The working capital facilities were extended by the bank under consortium arrangement and provisions will be made as per the RBI guidelines " the bank s Company Secretary Prasanna Patil said in the filing.

Choksi and his nephew Nirav Modi are already facing investigation in the Rs 13 540-crore fraud they committed on the state-run Punjab National Bank s Mumbai branch which came to light after they left the country in early January.

--IANS
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