After PNB fraud, City Union Bank suffered three fraudulent remittances

Vastavam web: Days after the Rs 11,400 crore fraud at PNB shook the country, private sector City Union Bank today said it suffered three fraudulent remittances of nearly USD 2 million (about Rs 12.8 crore).Just like the fraud at Punjab National Bank (PNB), no entries of remittances were made in the ledgers of City Union Bank and transfers were pushed through the SWIFT financial platform.Of the 3 fraudulent remittance, one remittance was made through Standard Chartered Bank, New York, to a Dubai based bank for USD 5,00,000 which was blocked immediately and was returned to City Union Bank, it said.

Chennai-based City Union Bank said the transfers had been made through correspondent banks even though it had not requested the transfers.A second transfer of 300,000 euros (USD 372,150) was routed through a Standard Chartered Bank account in Frankfurt to a Turkish account, while a third totalling USD 1 million was sent through a Bank of America account in New York to a China-based bank.The recent episode raises question mark on the efficiency of the SWIFT network as how secure it is.

The PNB fraud pertains to issuance of fake Letters of Understanding (LoUs) to companies associated with billionaire jeweller Nirav Modi by errant PNB employees which enabled these companies to raise buyers credit from international branches of other Indian lenders.Last week, PNB had lodged an FIR with CBI stating that fraudulent LoUs worth Rs 280.7 crore were first issued on January 16. At the time, PNB had said it was digging into records to examine the magnitude of the fraud.The bank sought 100 per cent cash margins for issuing LoUs for raising buyers credit, which was contested by the firms saying they had availed of the facility from as early as 2010.