SFIO summons ICICI chief Chanda Kochhar, Axis Bank CEO Shikha Sharma

New Delhi: The Serious Fraud Investigation Office (SFIO) on Tuesday summoned ICICI Bank chief Chanda Kochhar and Axis Bank CEO Shikha Sharma for interrogation in the multi-crore Punjab National Bank (PNB) scam case.
Both Kochhar and Sharma have been summoned for giving Rs 5,280 crore working capital facility to Mehul Choksi-promoted Gitanjali Group by a consortium of 31 banks. ICICI Bank, with a loan of Rs 405 crore reportedly, was a lead banker in this consortium and Axis Bank too had a major exposure in it.
Punjab National Bank had detected an over Rs 12,600 crore scam where billionaire jeweller Nirav Modi and his uncle Mehul Choksi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders. It is alleged that Choksi and Modi got Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to the credit giving bank along with accruing interest.