The CBI has strongly opposed the discharge plea of Manoj Kharat, a former single-window operator accused in the multi-crore Punjab National Bank fraud case involving fugitive businessman Nirav Modi.
The CBI said that Kharat was aware of the illegal activities. Kharat is currently out on bail. The matter will be heard on June 19.
The CBI alleged that Gokulnath Shetty, a retired deputy manager, and Kharat, who worked as a single-window operator at PNB’s Brady House branch in Mumbai, issued several Letters of Undertaking (LOUs).
The Punjab National Bank (PNB) Mumbai LoU fraud was one of the biggest banking scams in India. The fraud came to light in 2018 and involved businessman Nirav Modi and Mehul Choksi. Fake Letters of Undertaking (LoUs) were allegedly issued from PNB’s Brady House branch in Mumbai without proper authorization and without recording them in the bank’s core banking system. Using these LoUs, companies linked to the accused obtained huge overseas loans from other banks. The total fraud amount was around ₹13,000 crore. After the scam was detected, agencies such as CBI and ED started investigations and several bank officials were also arrested.
According to the CBI, the fraud involved bypassing normal banking procedures, including sanctioned limits, cash margins, and proper documentation. The transactions were allegedly kept outside the bank’s Core Banking System (CBS) to avoid detection.
The CBI said these LOUs were issued on behalf of companies linked to Nirav Modi, including Diamond R US, Stellar Diamond, and Solar Export. The agency further stated that on February 13, 2018, PNB informed the CBI that Shetty, along with others, had issued 150 fake LOUs worth around Rs 6,498 crore before his retirement in 2017, causing heavy losses to the bank.
The investigation later found that between 2011 and 2017, bank officials had fraudulently issued 1,214 LOUs worth nearly Rs 23,780 crore.
However, Kharat’s discharge plea, filed through Asit Chaware, claimed that Gokulnath Shetty was responsible for making entries in the SWIFT and CBS systems, and that Kharat had no knowledge of any wrongdoing. The plea also said that Kharat did not benefit from the alleged fraud and did not receive any money.
The plea stated that Kharat was only working as a clerk under the supervision of the deputy manager and had typed SWIFT messages under his instructions. It argued that he was being made a “scapegoat” in the case.
It was also argued that the practice of issuing LOUs without limits or 100% margin was already continuing at the Brady House branch even before 2011, before Kharat joined the branch in 2014.
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