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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

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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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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