ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 19 April. Click Here for more information.
ForumIAS Answer Writing Focus Group (AWFG) for Mains 2024 commencing from 24th June 2024. The Entrance Test for the program will be held on 28th April 2024 at 9 AM. To know more about the program visit: https://forumias.com/blog/awfg2024
PNB warns peers about LoU fraud
Context:
- Reeling from a ₹11,500-crore fraud, Punjab National Bank reached out to alert other lenders to the perpetrators’ modus operandi, while at the same time apportioning a share of the blame to its competitors’ overseas branches.
What has happened?
- Recently, PNB found that the SWIFT system had been misused by a junior-level branch officials, who had fraudulently issued letters of undertaking (LoUs) on behalf of some companies for availing buyer’s credit from overseas branches of Indian banks.
- The SWIFT network and identification codes are most commonly used for international wire transfers.
- In one instance, LoUs were opened in favour of overseas branches of Indian banks for import of pearls for a period of one year, for which as per RBI norms, the total time period allowed is 90 days from the date of shipment.
