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Diamond merchant Nirav Modi’s $1.8 bn scam on PNB will leave the banking sector in disarray

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Diamond merchant Nirav Modi’s $1.8 bn scam on PNB will leave the banking sector in disarray

Even as another multi-billion dollar shady deal within the Indian banking sector comes to light through the Rs 11,292 crore ($1.8 billion) scam by diamond merchant Nirav Modi, political parties have started the blame game, and it is most likely that the suspension of ten employees of Punjab National Bank apart, no other person will be tainted.

Modi himself, quite like liquor baron Vijay Mallya and alleged IPL scam master Lalit Modi, has left the country with his entire family and it’s not sure as of now if India even has an extradition treaty with whichever country he is in. The bankers, of course, will remain untouchable, despite having disbursed public money to scamsters.

Technically, the bank could have stopped payment – these were actually short term loans, called buyer’s credit – at any time on the ‘letters of undertaking’ (LoUs) that it and Modi had signed, allowing Modi to pick up raw diamond from sellers abroad.  These LoUs were signed by PNB and three diamond firms belonging to the Modi Group and some other firms owned by Gitanjali Gems. These companies had opened current accounts at a domestic branch of PNB and,as per the LoUs, money would have been paid by the bank to overseas sellers in foreign currency. This is a common practice, but it would unwise to believe that the bank never did an audit of the money paid and the reimbursements thereafter. That it was a collusion with the clear purpose of a scam is clear.

It is also inconceivable that only ten people (those suspended) were in the know of things, when even the foreign sellers (who sold the raw diamonds to Modi’s firms) held accounts at foreign branches of Indian banks.

The idea of the scam, as disclosed, was that a junior official at PNB fraudulently issued ‘letters of undertaking’, allowing Modi’s companies to get those short term loans from overseas bank branches. Expectedly, the PNB was the guarantor of these loans. A huge number of LoUs would have been done for the amount to reach such gargantuan levels, and in the age of total computerisation of transactions, the bank wants the public to believe that this was the secret work of a select few.

The initial complaint against Modi (in January) was for a Rs 280 crore fraud. Then the bank went to the CBI with the humongous complaint. That was in January 29, by which time Modi had fled the country with his entire family. While Rs 282 crore, in an age of huge scams, did not raise the red flag, the bigger one did. But by that time it was too late to nab Modi.

It has been reported in the media, which have quoted government sources sa saying that Modi and his family fled the country in the first week of January much before the CBI received a complaint from PNB.

It has also been reported that Modi has allegedly sought six months time from PNB to repay the loan.

On 15 February, ED raided nine premises of entities involved in the case.

Leave alone Modi till one can find him. But the bank, like all other banks in such scams, will have a lot of answering to do. This is especially so, because while the BJP says that the Congress should answer because it all started in 2011, the Congress says how come the BJP had no inkling of such a huge scam?

—India Legal Bureau

India News

Congress, BJP attack Bhagwant Mann over remarks on Punjab blasts

Congress and BJP have jointly criticised Punjab CM Bhagwant Mann after he linked recent blasts near defence sites to political motives, triggering a controversy.

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Bhagwant Mann

A political row has erupted in Punjab after Chief Minister Bhagwant Mann linked recent blast incidents to political motives, drawing sharp criticism from both the Congress and the Bharatiya Janata Party (BJP).

The controversy follows two low-intensity explosions reported within a short span of time — one near the Border Security Force (BSF) headquarters in Jalandhar and another close to an army cantonment area in Amritsar. The incidents raised concerns over security, particularly given the sensitive nature of the locations.

In response, Mann suggested that the blasts could be part of a larger political strategy. His remarks triggered a strong backlash, with opposition parties accusing him of politicising a serious security issue.

Leaders from the Congress criticised the Chief Minister’s statement, calling it inappropriate and alleging that such comments undermine the gravity of the situation. They stressed that matters related to national security should be handled with caution and responsibility.

The BJP also joined the criticism, questioning the basis of Mann’s claims and urging the state government to focus on investigation and law enforcement instead of making political allegations.

The developments have led to an unusual moment where both Congress and BJP appear aligned in their criticism of the Aam Aadmi Party-led government in the state.

Meanwhile, the blasts themselves have intensified concerns over safety in border regions, with authorities continuing their investigation into the incidents. No casualties were reported, but the proximity to defence establishments has made the issue particularly sensitive.

The episode has further escalated political tensions in the state, with security and accountability emerging as key points of debate.

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India News

Himanta Biswa Sarma resigns as Assam chief minister, oath ceremony likely after May 11

Himanta Biswa Sarma resigns as Assam Chief Minister after BJP-led NDA’s victory. He will continue as caretaker CM until the new government is sworn in after May 11.

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Himanta sharma

Assam Chief Minister Himanta Biswa Sarma resigned from his post on Wednesday, paving the way for the formation of a new government after the BJP-led NDA secured a decisive victory in the 2026 Assembly elections.

Sarma submitted his resignation to Governor Lakshman Prasad Acharya at Lok Bhawan in Guwahati. The Governor accepted the resignation and asked him to continue as the caretaker Chief Minister until the new government takes charge.

The resignation comes after the NDA’s strong electoral performance, where the alliance won a clear majority in the 126-member Assembly, ensuring its return to power for another term.

Oath ceremony expected after May 11

Speaking to reporters after submitting his resignation, Sarma said the swearing-in ceremony for the new government is likely to be held after May 11.

He indicated that Prime Minister Narendra Modi has been invited to attend the ceremony but is unavailable until May 11, which has influenced the tentative schedule.

Decision on next chief minister soon

Sources suggest that central observers, including senior BJP leaders, are expected to arrive shortly to oversee the selection of the legislature party leader. The newly elected MLAs will then decide on the next Chief Minister.

Despite the formal resignation, party sources indicate that Sarma is likely to continue in the role for another term, given the BJP’s strong mandate in the state.

The move marks the beginning of the government formation process in Assam following the election results declared earlier this week.

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Rahul Gandhi and Vijay alliance took shape through backchannel talks, early signals from Congress leaders

Congress outreach and political calculations led to Rahul Gandhi and Vijay coming together after the Tamil Nadu 2026 election results.

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The coming together of Rahul Gandhi and actor-politician Vijay in Tamil Nadu after the 2026 Assembly elections was not sudden, but the result of behind-the-scenes political manoeuvring and early signals within the Congress.

According to media reports, some leaders in the Tamil Nadu Congress had already sensed the scale of Vijay’s surge during the campaign, anticipating what was later described as a “wave” in favour of his party.

After the results, where Vijay’s Tamilaga Vettri Kazhagam (TVK) emerged as the single largest party but fell short of a majority, communication channels between the Congress leadership and Vijay quickly became active.

A key moment in this evolving political equation was a phone call from Rahul Gandhi to Vijay, congratulating him on the party’s strong performance. The conversation was seen as more than a courtesy, signalling the possibility of cooperation at a time when government formation required additional support.

Reports indicate that discussions within Congress weighed the political benefits of supporting Vijay, especially given the shifting dynamics in the state where traditional dominance by major Dravidian parties has been challenged.

With TVK needing allies to cross the majority mark, Congress emerged as a potential partner, leading to a broader political realignment in the state. This development also triggered tensions within opposition alliances, highlighting the strategic importance of the decision.

The evolving partnership reflects a mix of electoral pragmatism and changing voter sentiment, particularly the growing influence of younger voters, which leaders acknowledged as a key factor in the election outcome.

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