PNB says it will honour all “bonafide commitments”
New Delhi : The $1.8 billion fraud-hit Punjab National Bank (PNB) on Monday said it would honour all “bonafide commitments” under Letter of Undertakings (LoU) and Foreign Letters of Credit (FLC) as per the law.
“PNB clarifies that we will honour all our bonafide commitments under LoUs and FLCs as per law of the land and as per specific existing guidelines of regulator i.e. RBI on LOUs and FLCs,” the company said on its website.
The Reserve Bank of India (RBI) on Friday denied having sent any instruction to Punjab National Bank (PNB), which detected a $1.8 billion fraud, to meet its commitments under the Letter of Undertaking (LOU) to other banks.
“There have been reports in the media that in the wake of fraud involving a sum of $1.77 billion that has surfaced in PNB, the RBI has directed PNB to meet its commitments under the LOU to other banks. RBI denies having given any such instructions,” the RBI said in a statement.
“The fraud in PNB is a case of operational risk arising on account of delinquent behaviour by one or more employees of the bank and failure of internal contr”ls,” the apex bank had said.
IANS
