Karnataka Bank reports fraud amounting to Rs. 86.47 crore loans extended to Gitanjali Gems

Banks in India seem to be getting no respite from the frauds and the defaulters. While the India’s biggest banking fraud involving Nirav Modi and Mehul Choksi is still fresh, another fraud has been reported to RBI by Mangaluru based Karnataka Bank.

The Bank in its stock exchange filing said that it has reported a fraud to the Reserve Bank of India (RBI) amounting to Rs. 86.47 crore in the fund based working capital facilities extended to  Gitanjali Gems Ltd. on account of non-realization of export bills and diversion of funds and however, Bank does not have any LoU exposure in the aforesaid company. The said working capital facilities were extended  by the Bank under consortium arrangement and necessary provisions will be made as per the extant RBI guidelines.

Nirav Modi and Mehul Choksi are facing investigation in the Rs. 13,000 crore fraud which was they committed on the state-run Punjab National Bank's Mumbai branch, which was reported in early January. Both have reportedly fled the country before the fraud came to light.