Mehul Choksi Caught in Belgium Over Involvement in Rs. 13,500 Crore PNB Scam
The fugitive diamond merchant and key accused in the Punjab National Bank (PNB) scam, Mehul Choksi, was caught in Belgium. He was arrested on April 12, 2025, at a hospital in Belgium. An effort is now on to take him back to India. Investigative bodies like the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) have filed for extradition. Choksi and his nephew, Nirav Modi, are accused of cheating Punjab National Bank to the tune of around Rs. 13,500 crore.
The scam broke out in January 2018. Choksi, however, had left the country prior to when the issue was revealed. In spite of all attempts to arrest him, he eluded arrest because of several legal loopholes.
The scam was detected in the Brady House branch of Punjab National Bank in Mumbai. Initially, it looked like a Rs 280 crore scam, but as the investigation went on, the figure increased to Rs 13,500 crore. On January 30, 2018, the CBI registered a First Information Report (FIR) against both Mehul Choksi and Nirav Modi as prime accused.
The two cheated the banking system by availing Letters of Undertaking (LOUs) from PNB without offering any security. LOUs are generally given by Indian banks to assist importers in getting goods from foreign exporters if they don’t have enough funds immediately. In a normal case, the issuing bank has to repay the money to the foreign bank, and security papers are taken as collateral from the businessman. But in this instance, the accused purportedly bribed bank officers to extend LOUs without collateral and made sure that no official records of these transactions were kept.
This criminal activity was suspected to have originated as far back as 2011. Impressed with the simplicity of the process, they diversified by setting up shell companies in multiple nations. From these companies, they continued to send huge amounts of money from PNB by overvaluing the worth of substandard diamonds. The bank soon realised colossal losses, which resulted in a probe that established the extent of the scam.
The fraud had a drastic effect on the financial health of Punjab National Bank. It caused a huge loss of Rs. 10,026.41 crore in the year 2018-19. The magnitude of the fraud shook the whole Indian banking sector, making it one of the largest banking scams in India. The government subsequently stepped in to stabilise the bank.
After the scam was exposed, Choksi escaped to Antigua in May 2018, where he gained citizenship through forged documents. Nevertheless, he went missing from his home on May 23, allegedly trying to escape to Cuba, but was intercepted in Dominica. Although caught, he escaped once more by employing legal means. Through his wife, who is a Belgian citizen, he gained Belgian nationality and began living there.
Now, following his arrest in Belgium, authorities are again hoping to bring him back to stand trial in India. Nirav Modi, on the other hand, is present in the United Kingdom. His extradition has been approved by the UK Home Ministry, but the move has been challenged by him in the High Court.
