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| 12 April, 2018

Two Bahrain residents questioned in $2bln India bank fraud

CBI questioned both residents working for Canara Bank’s Bahrain branch

A man reads a newspaper outside a branch of Punjab National Bank (PNB) in Ahmedabad, India, March 20, 2018.

A man reads a newspaper outside a branch of Punjab National Bank (PNB) in Ahmedabad, India, March 20, 2018.

REUTERS/Amit Dave

Two Bahrain residents have been questioned by India’s top investigative agency in connection with an alleged $2 billion fraud.

Both work for Canara Bank’s Bahrain branch and were questioned yesterday by India’s Central Bureau of Investigation (CBI).

The CBI is investigating India’s biggest banking fraud, which targeted Punjab National Bank (PNB), and has made 20 arrests so far, according to reports.

Two high-profile diamond traders, Nirav Modi and Mehul Choksi, are also wanted for questioning in connection with the case.

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PNB reportedly uncovered the $2bn scam in January.

“The Central Bureau of Investigation on Wednesday questioned two Canara Bank officials from the Bahrain branch and one Bank of India official from the Antwerp branch in Belgium,” said Indian news agency Asia News International (ANI).

The overseas Indian branches are said to have extended credit facilities to companies owned by Mr Modi and Mr Choksi.

However, Indian media reported that this was based on fraudulent bank guarantees issued by a PNB branch in Mumbai.

An official at Canara Bank in Manama declined to comment when contacted by the GDN yesterday.

“We have no information on this matter,” he said.

The Bahrain branch is one of three overseas Canara Bank operations being closed, its managing director and chief executive officer Rakesh Sharma told Indian daily Business Standard this week.

He added the Manama branch’s work would be transferred to its Dubai offices.

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