Fifa World Cup
Homefinance News

Outstanding buyers' credit plunges to $25 billion post PNB scam, says report

Outstanding buyers' credit plunges to $25 billion post PNB scam, says report

Outstanding buyers' credit plunges to $25 billion post PNB scam, says report
Profile image

By CNBC-TV18 Aug 24, 2018 9:52:02 AM IST (Updated)

Since the Rs 14,000 crore Punjab National Bank fraud committed by diamantaire Nirav Modi and Mehul Choksi was uncovered, the overall buyers’ credit has shrunk by 1.72 lakh crore ($25 billion), Business Line reported.

Recommended Articles

View All

According to data compiled by a trade finance firm buyerscredit.in, the overall outstanding buyers’ credit (OBC) stood at Rs 3.43-lakh crore ($49.4 billion) as of June 2018, compared to Rs 5.15-lakh crore ($74.21 billion) as of June 2017, the report said, adding that State Bank of India, Bank of India and Bank of Baroda have been hit the most.
“There is a big gap in financing, and trade finance of less than $1 million is hardly taking place, which is a big problem for small and medium enterprises,” Sanjay Mandavia of buyerscredit.in was quoted in the report.
PNB scam accused Nirav Modi and Mehul Choksi allegedly used letters of undertaking (LoUs) and letters of comfort (LCs) to make the transactions worth Rs 14,000, as a result, the Reserve Bank of India (RBI) prohibited the banks from issuing them. Prior to the ban, the outstanding buyers’ credit was about $91 billion, it added.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!