PNB fraud case: Axis Bank says 'sold down' LoU transactions

Axis Bank today said it is an active participant in the secondary market for transactions against letters of undertaking and it "sold down" certain such dealings with Punjab National Bank.

Referring to media reports about certain buyer's credit transactions with PNB, which is at the centre of a Rs 11,400 crore fraud case, it said that in the normal course of business, the bank undertakes such transactions against letters of undertakings (LoUs) issued by other banks through its overseas branches.

"These amounts are then credited to the LOU issuing bank's Nostro accounts. Axis Bank has in the past undertaken such transactions with PNB against their authenticated SWIFT LOUs," it said in a regulatory filing. SWIFT is a software to perform such transactions.

"Axis Bank is also an active participant in the secondary market for such transactions, and the Bank has sold down all of the referred transactions," it added.

State-owned Punjab National Bank had yesterday said it has detected a USD 1.77 billion (about Rs 11,400 crore) scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.

While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.

Stock of Axis Bank today closed 0.17 per cent down at Rs 543 on BSE.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)