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PNB Yet To Identify LCs, Hope To Find Few Genuine Ones

PNB Yet To Identify LCs, Hope To Find Few Genuine Ones

Sifting the genuine LoUs from the fraudulent is a daunting task which is yet to be completed by the lenders. A senior banking official stated that the possibility of genuine LCs existing of Gitanjali Gems could not be ruled out and presently no numbers could be attached to either of them.

Though the PNB issued LoUs were unauthorized, lenders are hopeful that a few of them could be genuinely raised which would result in some money inflows. For the time being LoUs associated with specific parties were deemed to be fraudulent.

The senior official continued that the exact numbers would be known only on maturity of the contracts. With the lender failing to approve and execute its commitment, the decision to bring in a regulator for resolving the issue was taken by the banks over the weekend.

With Monday being a bank holiday because of Shiv Jayanti, the banks would approach Deputy Governor of RBI, N S Vishwanathan on Tuesday. Lenders have confirmed their willingness to provide PNB with a credit line if it gave its approval for honoring its commitment. But sources from PNB stated that the liquid funds available with the bank were sufficient enough to meet the commitment, however, they were of the opinion that they should be liable to make payments against genuine transactions.

Rajnish Kumar, the SBI Chairman stated that he was hopeful of an amicable settlement of the issue and was not worried about the payment factor. Following the RBI guidelines was the key to sort out the issue consensually, he felt. The lead banker in the Consortium of Banks for Gitanjali group is the ICICI Bank. The bank will be conducting the company’s forensic audit and has hired T R Chadha, an auditor based in Delhi for the purpose.