(Bloomberg) -- India’s second-largest state-run lender this month disclosed it has been hit by the nation’s biggest ever bank fraud.
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Billionaire jeweler Nirav Modi and his associates colluded with a rogue employee at Punjab National Bank to obtain fraudulent guarantees worth $1.8 billion dollars over seven years, PNB alleges. They then used these documents to obtain loans from lenders abroad, according to PNB’s complaint, which has been made public.
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As authorities try to contain the fallout from the scam, here’s a look at key dates in the road to discovery:
DATES | EVENTS |
2011 | PNB employee allegedly starts providing fraudulent letters of understanding to Modi and associates |
February 2016 | Hackers make off with $81 million by sending fake messages through the Bangladesh Bank’s Swift interbank messaging system |
August 2016 | Reserve Bank of India sends a circular to all Indian lenders, advising them to make sure their internal software -- core banking solution or CBS -- is properly integrated with Swift |
November 2016 | RBI issues stronger circular, citing “decentralized” operations that hinder compliance and a “high number” of Swift user IDs at banks that increased the risk of misuse, according to a document seen by Bloomberg. RBI asks banks to “explore” straight-through processing of CBS and Swift |
Feb. 28, 2017 | Banks were due to complete an RBI-mandated verification of all their Swift messages, especially those pertaining to trade finance, to ensure all were “supported by genuine underlying transactions,” according to a document seen by Bloomberg |
March 15, 2017 | Banks were due to report the results of this verification to the RBI |
May 2017 | PNB employee who was allegedly colluding with Modi retires |
Jan. 16, 2018 | PNB alleges that billionaire jeweler Nirav Modi’s associates sought fresh funds from PNB; PNB begins digging into transaction history |
Jan. 25, 2018 | PNB says it found first evidence of fraud |
Jan. 25, 2018 | PNB tells customers it will immediately start updating its CBS to the latest version, which will be used starting Jan. 29 |
Jan. 29, 2018 | PNB submits report on fraud to RBI and files complaint with federal investigators |
Feb. 14, 2018 | PNB discloses $1.8 billion fraud |
Feb. 15, 2018 | RBI tells banks to revisit controls outlined in 2016 advisories, according to document seen by Bloomberg |
Feb. 21, 2018 | Banks due to report to RBI on implementation of these controls, according to document seen by Bloomberg |
©2018 Bloomberg L.P.