April 6, 2018 / 12:07 PM / a year ago

Indian police questioned former cenbank deputy governor in PNB bank fraud case: source

NEW DELHI, April 6 (Reuters) - India’s federal police have questioned former deputy governor of the central bank, H.R. Khan, in relation to the $2 billion fraud at state-run Punjab National Bank, a government source told Reuters on Friday.

It was not immediately clear what was Khan questioned about. Khan was not immediately available for a comment.

Two jeweller groups have been accused of defrauding banks by raising loans from overseas branches of Indian lenders using nearly $2 billion of fraudulent guarantees issued by rogue Punjab National Bank staff at a Mumbai branch.

The fraud - which is being investigated by India’s federal police and other enforcement agencies - is the biggest in the country’s banking history.

Separately, four senior Reserve Bank of India officials were called on by investigators to help explain banking processes, sources familiar with the matter said on Thursday. A federal police source had said the agency was questioning them, without giving further details. (Reporting by Nigam Prusty and Neha Dasgupta; Writing by Aditya Kalra; Editing by Sanjeev Miglani)

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