Modi and his 22 companies are the main focuses of the scandal. The situation is likely to pose a tough challenge for PNB's chief Sunil Mehta who took charge a year ago when his bank and 12 other banks were reprimanded and fined by Reserve Bank for violating foreign exchange regulations amounting to more than $1 billion.
Besides, there is allegation of forgery and unauthorised use of global payment network SWIFT for unauthorised issuance of credit instrument (LoU) while lenders issued standby letters of credit in favour of worldwide bullion banks to supply gold to Winsome Group companies.
According to an Indian Express report, ED Director Karnal Singh has written to the banks for details of the loans given to the two, the present status of the loans, the collaterals offered, and the form and nature of the loans. "At no stage, such facilities were extended by our bank to your three partner firms". After this scam exposes all other celebrities who were the part of Nirav Modi brand can be to curb misleading ads by celebrities. He also believed it jeopardised its ability to clear the dues. He said the $1.8 billion cited by the bank had resulted in a media frenzy that pressured authorities to quickly search and seize assets from his Firestar International and Firestar Diamond International companies.
"This thereby jeopardised our ability to discharge the dues of the group to the banks".
The ED has reportedly expanded its probe against diamantaires Nirav Modi and Mehul Choksi to include loans taken by them from 16 other banks over the past few years, apart from the PNB.
Separately, India's federal police on Thursday registered a case against a Delhi-based jeweler on a fraud complaint filed by Oriental Bank of Commerce, another state-owned bank, a police source said. As of last Saturday, it had seized jewellery, gold, diamonds, precious metals and stones that it said were worth 56.74 billion rupees ($872.5 million). Well below the amount alleged by the bank.
Born into a Gujarati family of diamantaires, Mr. Nirav Modi, the billionaire businessman caught in the middle of the controversy, grew up in Belgium, which is known as the center for global refined diamond trade.