Today, the Serious Fraud Investigation Office (SFIO) issued letters to 31 banks asking them to explain about the working capital loans given to Gitanjali Group. Mehul Choksi, one of the key accused in the Rs. 12,700 crore Punjab National Bank (PNB) fraud heads the Gitanjali Group.
Around 31 banks had provided working capital loans to Gitanjali Group. The 31 banks include ICICI Bank, Axis Bank and PNB. A working capital loan is the funds provided by the bank for financing the everyday operations of a company. Working capital loans are used to cover wages, accounts payable etc.
The SFIO summoned the Chief of ICICI Bank Chanda Kochhar and the CEO of Axis Bank Shika Sharma for interrogation. Both the heads have been summoned for providing Rs. 5,280 crore working capital facility to Gitanjali Groups. The ICICI Bank is leading the group with a loan of Rs. 405 crore.
Earlier, the PNB filed a case with the CBI stating they detected a large number of fraudulent transactions in its Brady House branch in Mumbai. The key accused had fled India by the time the fraud was detected.