Gitanjali Gems forces NPAs up by 8,000 crore

The accounts of Gitanjali Gems and Mehul Choksi’s group of companies, which are currently embroiled in the biggest fraud scandal in India’s banking history, have forced up Non-performing Assets (NPAs) this past quarter.

Mehul Choksi’s group of companies have forced up NPAs by 8,000 crore - Gitanjali Gems- Facebook

NPAs, bad loans in the banking sector, will increase by 8,000 crore rupees (approximately 1,202.5 million US dollars) due to Gitanjali Gems’ accounts turning bad during the financial quarter that ended on March 31 this year. This shows just how much the jewellery business’ fraud scandal has affected the banking sector in India at large.

Banks have to provision this sum of money for the Gitanjali Group and it was the biggest account that turned bad during the quarter which was the last quarter of the 2017/2018 financial year. The total NPAs reached 840,958 crore rupees last December (approximately 12.6 billion dollars), according to government estimates.

Mehul Choksi, the promoter for Gitanjali Gems, is currently in hiding abroad after leaving India before news of his accused fraud at the Punjab National Bank (PNB) broke this spring. Choksi has a non-bailable warrant issued against him, as does his nephew Nirav Modi.

The PNB issued over 1,500 letters of undertaking (LoUs) to Choksi, Modi, and their associates over the period when the fraud is believed to have taken place. The current fraud total for Choksi and Modi together is at around 13,000 crore rupees (approximately two billion US dollars) but this could still increase.

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