Why the Indian Government is looking for Nirav Modi? The Nirav Modi Scam?


The Nirav Modi Scam, Read this post now if you don't know why the Indian government is looking for Nirav Modi? What scam did he do in India?



  • On January 16th, 2018, employees from Nirav Modi’s diamond trading firm came to the Brady House branch of Punjab National Bank to receive LoUs (Letter of undertaking) in order to make payment overseas.
  • The bank official demanded a cash margin of 100% for issuing LoUs.
  • In return, the employees said, they have received similar LoUs in the past without any cash margin or bank guarantee

  • The incident that happened on January 16, 2018, raised some suspicion in the Punjab National Bank. Upon digging deep, the bank discovered fraudulent LoU transactions worth 14,000 crores in the past 7 years. These transactions were made by firms owned by Nirav Modi and his uncle Mehul Choksi using fraudulent LoUs obtained from the bank.
  • .On January 29, 2018, PNB approached the CBI and registered the case regarding the same

What is LoUs?

  • Letter of Undertaking is a form of Bank guarantee. LoUs involves 3 entities, the issuing bank, the receiving bank, and the beneficiary.
  • The issuing bank instructs a foreign branch of Indian Bank (the receiving bank) to provide a line of short-term credit to the beneficiary.
  • In return, the issuing bank guarantees the line of credit along with the interest payable in case the beneficiary fails to repay the line of credit.

How did he manage to take LoUs?

Nirav Modi conspires with bank officials of  PNB to obtain those LoUs. The bank officials in PNB’s Brady House Branch bypassed the Core Banking System of the Bank to issue those LoUs and
transmit the request to foreign branches of Indian Banks.

Why he was not caught in India?

Before the scam was unfolded Nirav Modi left India. A lookout notice was issued for Nirav Modi and Mehul Choksi.

Work of CBI?

CBI has so far arrested Big PNB officials including its former CEO along with CBI has arrested the executives of Nirav Modi and Mehul Choksi.

Work of Enforcement Directorate(ED)?

The ED has taken the properties of Nirav Modi to recover the amount he scammed from the PUBLIC SECTOR BANK. 

Later, The bank was recapitalized by the Government of India

According to the reports Nirav Modi is In London and waiting for a verdict in his extradition plea.