SrinagarAdmitting that a working capital loan of Rs 121 crore had been sanctioned by a Mumbai branch of the J and K Bank for M/S Geetanjali Gems in 2012, an official spokesman of the bank on Thursday said that it had categorized the loan as stressed one-and-a-half years ago, and following the companys developments with the PNB, already initiated a freeze on all debits in its account, besides issuing a recall notice to the company which would be followed by legal action.
The Bank was reacting to news reports quoting officials that it had taken no steps to recover the loan over six years and taken no action against bank officials who had sanctioned the loan.
The Bank has no direct exposure to the Nirav Modi Group companies and is not affected by any fraudulent Letters of Undertaking (LoU) issued by the Punjab National Bank, a statement by the official spokesperson of the J and K Bank said.
The bank however is having a business account of M/S Gitanjali Gems in its Fort Business Unit since 2012 wherein the bank has sanctioned a working capital loan of Rs 121 Cr under a consortium arrangement of 31 Banks led by ICICI Bank, the statement said.
J & K Banks share in the total loan facilities of Rs 5198 Cr by the consortium was 2.33 per cent, it said.
In the wake of recent developments of the company with PNB, the consortium recently discussed and agreed that Banks may individually decide to recall the facilities and may also freeze all the accounts except for allowing few mandatory/statutory payments, it said.
Acting swiftly, JK Bank has already initiated freeze on all debits in the account of Gitanjali Gems Limited and issued recall notice to the company which will be followed by legal action, it said.
Any other information regarding the matter in some sections of media as factually incorrect, it said.
Notably the bank had during its clean up and consolidation drive a year and a half ago reckoned the account as a stressed account and consciously avoided additional exposure in the company, it said.
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