Nirav Modi scam may be bigger than 11,000 crores

The Enforcement Directorate and other investigation agencies are now saying that the size of the Nirav Modi scam is bigger than Rs 11,000 crore and an additional liability of Rs 3,000 crore has been discovered in the Nostro accounts. The gaping holes in Nostro account monitoring and the SWIFT messaging system were fully exploited by Nirav Modi. Inspite of the RBI’s warning to the national banks to closely monitor the Nostro accounts this was not done.

Demonetisation was futile in this multi-milllion dollar fraud

Instead it has been revealed that the size of the fraud increased greatly over the past year. Though Nirav Modi’s companies have been using letters of credit from 2011, the investigation so far suggest the fraud multiplied in size over the past two years, and more specifically since January 2017. So the claim of demonetisation controlling money-laundering is proved wrong as the exact opposite seems to be the case with Nirav Modi.

One estimate is that at least 20-plus banks are saddled with such Nostro account liabilities created by Nirav Modi and other diamond companies associated with him.