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Another incident of bank scam gets reported, and this time State Bank of India reported about the bank fraud of around INR 824 crore by jewellery chain Kanishk Gold. Not only the State Bank India, 14 others bank including Punjab National Bank also alleged the merchant for cheating. In January SBI sought for a CBI investigation on jewellery chain Kanishk Gold Pvt Ltd accusing of loan fraud.
The promoters and directors of the company registered in T Nagar in Chennai included Bhoopesh Kumar Jain and his wife Neeta Jain. None of them is reachable by the bank officials. The alleged couple is believed to be residing in Mauritius. The CBI has not filed an FIR in this matter.
Kanishk took loans from an association of 14 public and private sector lenders, of which SBI was the main lender. On January 25th 2018, SBI charged Kanishk on a letter to CBI for manipulating records and shutting down shops overnight. The first time the account was declared to be fraudulent by SBI on November 11, 2017 and by January, all other banks announced the same to the Reserve Bank of India. It was reported that total amount of defaulted loans is about INR 824 crore, but adding up the interest may amount to a loss of more than INR 1000 crore to the banks.
As per the reports, in March 2017 Kanishk made its first default in the payment of interest to eight banks, and by next month it stopped it with all 14 banks. They were totally out of reach of the bankers when it initiated its stock audit on April 5th, 2017, and by 25th of the same month, bank officials visited Kanishk’s corporate office, showroom, and factory where they found the facilities were shut with no activity or any stock. On the same day, Bhoopesh Jain wrote a letter to the bankers confessing falsification of records and removal of stocks which are secured as collateral to the lenders. When the officers visited other showrooms, it had its door locked.
A representative from the Madra Jewellers and Diamond Merchants Association said that the company shut down as early as May 2017 since it could not cope with the losses it suffered. Banks had increased the credit limit and working capital loan limit to the jeweller with the passing of years. SBI, in 2008 took over the loan from the ICICI Bank which amounts to INR 50 crore in working capital loan and INR 10 crore in term loans which were later converted in March 2011 into multiple banking arrangements with Bank of India and Punjab National Bank.
SBI, as the leader of the association of banks, authorized Kanishk to receive a metal gold loan (MGL) in 2012 and using that option it purchased gold in the form of billions from nominated banks in the association or from the open market using credit under MGL or from its current account.
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