NEW DELHI, Feb 16 (Reuters): Indian billionaire jeweller, Nirav Modi, who is facing accusations that he defrauded a state-run bank of $1.77 billion left the country on January 1 even before a case against him was registered, a federal police source said.
The Central Bureau of Investigation (CBI) last week said they were investigating Modi, jeweller to the celebrities, and others over accusations that they defrauded Punjab National Bank (PNB).
The police source said they had issued a "look out" notice for Modi after registering a case against him on January 31.
Indian Foreign Ministry has suspended passport of Nirav Modi accused of bank fraud.
Another report adds: Investors may have been shocked when one of India's biggest banks disclosed a $1.77 billion fraud by a billionaire jeweller, but the central bank has recorded data that shows the problem runs far deeper and wider.
Reserve Bank of India (RBI) data, which a Reuters reporter obtained through a right-to-information request, shows state-run banks have reported 8,670 "loan fraud" cases totaling 612.6 billion rupees ($9.58 billion) over the last five financial years up to March 31, 2017.
In India, loan frauds typically refer to cases where the borrower intentionally tries to deceive the lending bank and does not repay the loan.
The figures expose the magnitude of the problem in a banking sector already under pressure after years of poor lending practices. Bad loans surged to a record peak of nearly $149 billion last year.
Bank loan frauds have steadily increased as well, reaching 176.34 billion rupees in the latest financial year from 63.57 billion rupees in 2012-13, according to the data, which doesn't include the PNB case.
Punjab National Bank, India's second-largest state lender, said on Wednesday two junior officers at a single branch had illegally steered $1.77 billion in fraudulent loans to companies, most of them controlled by billionaire jeweler Nirav Modi. It was India's biggest fraud ever.
In India, billboards above the traffic jams of New Delhi bear the image of Priyanka Chopra, a Bollywood star and former Miss World who is fast becoming a household name in the United States, also adorned with Modi's jewels.
A spokesperson for Chopra, the film star, said in a statement: "She is currently seeking legal opinion with respect to terminating her contract with the brand in light of allegations of financial fraud against Nirav Modi."
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