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PNB Fraud: SBIs $212 Million Exposure To PNB's LoUs

SBI chairman said the bank has lent $212 million to Modi on the basis of LoU issued by PNB. Kumar,

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PNB Fraud: SBIs $212 Million Exposure To PNB's LoUs

SBI's exposure to Gitanjali is very small, chairman Rajnish Kumar said


Kochi: Nation's largest state lender State Bank of India (SBI) today said that it has an exposure of $212 million (Rs 1,360 crore) in respect to letter of undertaking (LOU) issued by Punjab National Bank (PNB) to Nirav Modi, but does not have any direct exposure to the 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.

He said the Swift system and the core banking system in SBI are integrated. He said banking is a risky business and risks are of various natures such as credit risks, operational risks, market risks and foreign currency risks. Operational risk is always an unknown risk. Credit risk a calculated risk ... you know during the appraisal about the probability of default, he said.

SBI's Exposure To PNB's LoUs To Nirav Modi 


1. SBI chairman 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.

2. SBI's exposure to Gitanjali is small we and we are not worried, Rajnish Kumar said. He said that there is a need to manage the risks by creating awareness about the risks, having standard operating procedures, strict compliance of these procedures and having a strong oversight.

3. When asked about the lender's exposure to the entire gems and jewellery sector, he said it is less than 1 per cent 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 per cent, he said.

4. Rajnish Kumar said 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.

5. One of the risk management practise which SBI follows 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.


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