The Hong Kong Monetary Authority has started a process of questioning officials of Indian banks located in Hong Kong about the Rs 11,300 crore Punjab National Bank fraud. The Hong Kong regulator is understood to have sought a report from those banks which have extended finance to jewelry companies founded by Nirav Modi and Mehul Choksi on the basis of letter of undertaking issued by the Punjab National Bank. At least 4 banks – Axis Bank, Allahabad Bank, Union Bank of India and UCO Bank – have financed the LoUs from their branches in Hong Kong. Among these, Axis Bank said it has already sold off the loans related to the LoUs. UCO Bank’s Hong Kong office is understood to have financed some 146 transactions for Mehul Choksi’s firms, such as Gitanjali Gems, Gili India and Nakshatra. Similarly, Union Bank of India has financed 77 transactions of the same companies.
