SBI discloses Rs 1,360 crore exposure through PNB

SBI discloses Rs 1,360 crore exposure through PNB

SBI discloses Rs 1,360 crore exposure through PNB

The country's largest lender SBI  on Friday said it has an exposure of $212 million (about Rs 1,360 crore) in respect to letter of undertaking issued by Punjab National Bank to Nirav Modi, but does not have any direct exposure to the absconding jewellery designer.

"We don't have any direct exposure on Nirav Modi but we do have some exposure on Punjab National Bank," State Bank of India Chairman Rajnish Kumar told reporters here  on Friday.

He said the bank has lent $212 million to Modi on the basis of LoU issued by PNB.

Kumar, however, said the bank has some exposure to Gitanjali Gems, owned by Mehul Choksi, uncle of Nirav Modi.

"Our exposure to Gitanjali is small and we are not worried," Kumar said. When asked about the lender's exposure to the entire gems and jewellery sector, he said it is less than 1% of the total domestic loan book. "My domestic loan book is Rs 16 lakh crore and gems and jewellery sector exposure is less than Rs 13,000 crore, which is less than 1%," he said.

He added that the bank is very careful as far as gems and jewellery industry is concerned and has been taking steps to put lot of risk mitigation measures for accounts from the sector.

He said SBI has an elaborate system of risk management and internal audits and the robustness of that system is very well recognised. "One of the risk management practice which we follow is job rotation. We don't keep a person for more than three years at one position. There are certain positions which are very sensitive and we monitor those positions very closely," Kumar said.

Union Bank has $300 m exposure

Union Bank of India has said it has an exposure of $300 million (around Rs 1,915 crore) to the Rs 11,400-crore PNB fraud case but stressed its money is safe and it will recover that. "We wish to inform you that the bank through our foreign branches has been taking exposure with PNB as counterparty under various Letters of Undertakings (LoU) issued through authenticated SWIFT message," Union Bank of India said in late night filing to stock exchanges.

The bank has also purchased some Buyers Credit assets from Axis Bank through Risk Participation as a part of normal International Business Practice, it said. Union Bank of India shares dropped 2.37% to Rs 117.25 while the PNB stock fell over 3% to Rs 124.45 on the BSE.

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