 In what could be one of the biggest frauds in the history of Indian banking, Punjab National Bank has reported unauthorized transactions worth 11,400 crores in one of its branches in South Mumbai. The enforcement directorate has registered a money laundering case in the matter, which involves Mumbai-based billionaire diamond merchant Nirav Modi, or NIMO as he's being called. The deputy general manager of Punjab National Bank's zonal office, Anvish Nepaliya, filed a complaint on the issue with the CDI. Nepaliya alleged that Nirav Modi, Nishal Modi, Ami Modi and Mehul Choksi, all of whom are partners at Diamond are Us, Solar Exports and Stellar Diamonds, conspired with a retired bank employee and a current staffer to defraud the bank. The bank has alleged that the accused employees issued 293 letters of undertaking and 224 foreign letters of credit since 2011 in favor of NIMOs companies to the Hong Kong branches of Alabad and Axis Bank. The companies connected to Nirav Modi got letters of undertaking through fraud from PNB. As per these LOUs, PNB assured overseas branches of other Indian banks like the Alabad Bank that it would stand guarantee to the loans given by these banks to Nirav Modi. According to banking rules, any such guarantee should have been backed up by a collateral from the borrower. But in this case, NIMO has obtained LOUs without putting any collateral with collusions with some of the bank officials. Instructions by Society for Worldwide Interbank Financial Telecommunication or SWIFT were transmitted to the overseas branches of other Indian banks to loan out money to Nirav Modi's companies without making any entry in the account books. PNB claims that the scam began in 2011 and the amount has gone up to Rs 11,400 crores, which is about eight and a half times its annual profit last year. That's one-third of its market capitalization before the scam came out. It is also more than double the amount of money the government put into PNB this year to recapitalize the bank. PNB claims that the fraud went undetected since 2011 because the LOUs sent through SWIFT were not tallied with companies' poor banking system and so the management never came to know these went out in the first place. But how did this happen? For seven years, all the audits and checks have failed to detect this massive scam. The entire story seems too fishy to be credible. The Modi government was informed several times that fraud was being carried out by Nirav Modi and others, but the government turned a blind eye. Nirav Modi and others fled the country in early January, coolly attended the World Economic Forum at Davos, got photographed with Modi, and only afterwards, at the end of January, did the CBI and PNB start looking into their fraud. It seems like they allowed Nemo and friends to flee, just like Malia. But more than the banks, he has faith in the gold of his village. He will go to a huge jewellery showroom. After bringing the jewellery, he will come to his showroom to check how big the showroom will be. My Mehul brothers are sitting here, but he will go. He will go to his showroom to check if he has come.