J&K Bank clarifies on Gitanjali Gems loan default case

Srinagar, Publish Date: Feb 23 2018 1:23AM | Updated Date: Feb 23 2018 1:23AM
J&K Bank clarifies on Gitanjali Gems loan default case

In respect of news item appearing in some sections of media J&K Bank official spokesperson today clarified that the bank had no direct exposure to the Nirav Modi Group companies and was not affected by any fraudulent Letters of Undertaking (LoU) issued by the Punjab National Bank.

The bank, added the spokesperson, however was having a business account of M/S Gitanjali Gems in its Fort Business Unit since 2012 wherein the bank had sanctioned a working capital loan of Rs 121 crore under a consortium arrangement of 31 banks led by ICICI Bank.   

“J&K Bank’s share in the total loan facilities of Rs 5,198 crore by the consortium was 2.33 percent,” the spokesperson said. 

“In the wake of recent developments of the company with PNB, the consortium recently discussed and agreed that banks may individually decide to recall the facilities and may also freeze all the accounts except for allowing few mandatory/statutory payments. Acting swiftly J&K Bank has already initiated freeze on all debits in the account of Gitanjali Gems Limited and issued recall notice to the company which will be followed by legal action.”

The spokesperson further said that any other information regarding the matter in some sections of media is “factually incorrect”.   

The bank had during its clean up and consolidation drive year and a half ago reckoned the account as a stressed account and avoided additional exposure in the company, he added.