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PNB scam: Here’s how Mehul Choksi and Nirav Modi orchestrated India’s biggest banking fraud

The arrest of Mehul Choksi has brought back focus on the Rs 14,000 crore PNB scam involving Nirav Modi and a network of fake credit guarantees.

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PNB scam

By Mohammad Javed Rasheedi

The arrest of fugitive businessman Mehul Choksi in Belgium has once again turned attention to one of India’s most significant financial frauds—the Punjab National Bank (PNB) scam. The Rs 14,000 crore fraud, which came to light in 2018, involved Choksi and his nephew Nirav Modi, who colluded with bank officials to illegally obtain credit guarantees using forged documents.

Choksi, who was reportedly living in Antwerp with his wife after securing residency in Belgium in late 2023, was arrested on April 12 from a hospital. His detention follows extradition efforts by Indian authorities, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), who have been pursuing him for years.

What was the PNB scam?

The fraud involved fraudulent issuance of Letters of Undertaking (LoUs) at PNB’s Brady House branch in Mumbai. Choksi’s firm, Gitanjali Gems and other entities linked to Nirav Modi, used these LoUs to obtain credit from foreign banks—far exceeding regulatory norms. These guarantees, worth thousands of crores, were issued without proper sanctions, security, or entries in the bank’s core system.

Investigations revealed that Choksi and Modi used the SWIFT network to communicate with overseas banks without updating PNB’s internal banking software, thereby bypassing oversight. This led to an estimated Rs 6,344 crore loss to PNB alone, as multiple Indian banks including SBI and Axis Bank released funds based on the fraudulent LoUs.

Timeline of the scam’s discovery

The scam began unravelling in early 2018 when employees from companies like Diamonds R Us, Solar Exports and Stellar Diamonds requested LoUs and were denied due to lack of margin security. Upon further checks, PNB discovered that such requests had been routinely granted in the past without collateral.

PNB filed a complaint with the CBI on January 29, 2018, naming Nirav Modi, Mehul Choksi and other accomplices, including bank officials. The initial fraud amount stood at Rs 280.7 crore but ballooned to over Rs 14,000 crore within months.

Nirav Modi first received a fraudulent LoU in March 2011 and went on to obtain over 1,200 such guarantees. The ED found that dummy companies abroad were used to funnel money and devices used for these transactions were allegedly destroyed by Nirav’s brother, Nehal Modi.

Modi fled India before formal charges were filed, applied for bankruptcy protection in New York in 2018, and was arrested in London in March 2019. He continues to fight extradition to India.

Mehul Choksi was declared a fugitive in early 2018 and fled India citing medical issues. He acquired Antiguan citizenship in 2017 and later tried to flee to Cuba in 2021. He was intercepted in Dominica and later returned to Antigua. He then reportedly moved to Belgium for medical treatment, where he was arrested following India’s renewed extradition request.

The Enforcement Directorate has seized assets worth Rs 2,362 crore linked to Choksi, spread across Thailand, Dubai, Japan, the US, and other locations. Coordination is ongoing with international authorities to recover and repatriate more assets.

India News

12 Maoists killed, 3 security personnel lose lives in major anti-Naxal operation in Chhattisgarh

A major anti-Naxal operation in Chhattisgarh’s West Bastar region resulted in the killing of 12 Maoists, while three DRG personnel lost their lives amid intense gunfire.

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Security forces have intensified their combing operations in the dense West Bastar forests after a fierce encounter left 12 Maoists dead and claimed the lives of three DRG personnel.

A coordinated offensive involving teams of DRG Bijapur-Dantewada, STF, CRPF and CoBRA unfolded deep inside Maoist-dominated terrain early Wednesday. According to Bijapur SP Dr Jitendra Yadav, the forces came under sustained Naxal gunfire around 9 am, triggering a prolonged encounter.

By afternoon, the bodies of 12 Maoist cadres had been recovered, while weapons seized from the area included SLR rifles, INSAS rifles, .303 rifles and other ammunition. Bastar Range IG Sundarraj P confirmed that identification of the deceased Maoists is still underway.

Three DRG personnel killed, two injured

The operation came at a grave cost, with three DRG personnel — Head Constable Monu Waddi, Constable Dukaru Gonde and Jawan Ramesh Sodi — losing their lives. Two others sustained injuries but are reported to be out of danger after receiving medical care.

Chief Minister Vishnu Deo Sai paid tribute to the fallen personnel and lauded the forces, stating that the action reflects a clear weakening of Maoist networks in the region. He said arrangements for treatment of the injured have been ensured and reiterated the government’s commitment to ending Maoist violence.

Forces strengthen search and area sealed

SP Yadav said additional reinforcements have arrived and the encounter zone has been fully cordoned off for intensified operations. Continuous combing is underway to locate remaining Maoist cadres.

Chhattisgarh Home Minister Vijay Sharma noted that forces have been consistently making gains in anti-Naxal missions, calling the latest action a significant strike against Maoist groups.

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India News

IndiGo flight cancellations cross 200 as crew shortage and new duty norms hit operations

IndiGo’s operations witnessed major disruption for the second day, with over 200 cancellations and severe delays triggered by crew shortage under new duty norms.

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India’s largest airline, IndiGo, is grappling with widespread disruption across major airports as flight delays and cancellations continue for the second consecutive day. With operations strained and punctuality plunging sharply, thousands of passengers have been left inconvenienced across Delhi, Mumbai, Bengaluru and Hyderabad.

IndiGo’s on-time performance dips sharply

Government data showed the airline’s on-time performance had dropped to 35%, a rare slump for the carrier known for punctuality. IndiGo, which operates more than 2,200 flights daily, saw over 1,400 flights delayed on Tuesday, followed by around 200 cancellations by Wednesday afternoon.

Mumbai Airport issued an advisory alerting passengers to check their flight status, citing airline-related operational issues impacting departures and arrivals.

New duty norms trigger severe crew shortage

A major factor behind the disruptions is the implementation of revised Flight Duty Time Limitation (FDTL) rules last month. The updated norms mandate longer rest hours and more humane rosters for pilots and cabin crew. Sources indicated many flights were grounded over the past 48 hours as crew availability dipped sharply.

IndiGo acknowledged a “multitude of unforeseen operational challenges” including technology glitches, winter schedule adjustments, weather-related issues and the new rostering norms. The airline said it has begun calibrated schedule adjustments for the next 48 hours to restore normalcy.

FDTL rules cap crew flying to eight hours a day and mandate a minimum rest period of 10 hours within a 24-hour window, with rest time amounting to twice the flight duration.

Airports across India see cancellations

The ripple effect of IndiGo’s disruptions has been felt nationwide:

  • Hyderabad’s RGIA reported 33 cancellations, leading to long queues and disrupted travel plans.
  • Bengaluru Airport saw 42 cancellations, including 22 arrivals and 20 departures, impacting routes to Delhi, Mumbai, Chennai, Goa and Kolkata.
  • Delhi Airport also saw congestion as a slowdown in the Amadeus system, used for check-ins and reservations, added to delays.

Passengers vent frustration

Several passengers took to social media to share their ordeal.
One traveller stranded in Hyderabad since early morning said they missed an important meeting due to continuous delays. Another flyer complained their Udaipur-bound flight was repeatedly delayed, calling the experience “a joke”.

IndiGo issues apology, offers rebooking

IndiGo said it is offering alternate travel options or refunds to affected travellers and urged passengers to check their flight status before leaving for the airport. The airline reiterated its commitment to stabilising operations “as quickly as possible”.

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India News

Centre withdraws order on mandatory Sanchar Saathi pre-installation after protests

The government has withdrawn its order making the Sanchar Saathi app mandatory on smartphones, following two days of intense criticism from opposition leaders and civil rights groups over privacy concerns.

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sanchar sathi app logo

The Centre has reversed its directive that required all smartphone manufacturers to pre-install the Sanchar Saathi cybersecurity app, following backlash from opposition leaders, civil rights groups and users who raised concerns over privacy and potential misuse.

Government cites rising downloads, public feedback

According to the government, the order was rolled back as user downloads had surged — with over six lakh installations within 24 hours and 1.4 crore total users. Officials said the mandate was originally intended to push wider adoption, but public feedback prompted a re-evaluation.

The official statement reiterated Communications Minister Jyotiraditya Scindia’s earlier assurance in Parliament that the app is deletable and does not enable snooping. The minister emphasised that in a democracy, every user has the right to remove applications they do not wish to use.

Opposition slams move, flags privacy concerns

Several opposition leaders criticised the initial directive, claiming it risked turning the app into a surveillance tool, echoing earlier privacy controversies. Priyanka Gandhi Vadra called the decision “ridiculous”, while Karti Chidambaram compared the mandate to practices in authoritarian countries. Leaders from other parties also raised objections, describing it as a move that could compromise personal data.

What the Sanchar Saathi app offers

Sanchar Saathi, developed by the Department of Telecommunications, is designed to help users secure their digital identities, report suspicious activity and access cyber safety awareness material. It is available both as a mobile app and a web portal. The government maintains the app has no function beyond safeguarding users from cyber threats.

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