Axis Bank Ltd made a disclosure today (under regulation 30 of Securities and Exchange Board of India (SEBI) regulations 2015), to stock exchanges that said that it has sold all transactions against Letter of Undertakings (LoUs) issued by Punjab National Bank (PNB).
It clarified that the Bank had undertaken transactions with PNB "against their authenticated SWIFT LoUs."
"Axis Bank is an active participant in the secondary market for such transactions, and the bank has sold down all of the referred transactions," it said further in the notice.
In its normal course a Bank, through its overseas branches, undertakes transaction against LoUs issued by other banks and these amounts are credited to the LoU issuing bank's Nostro accounts.
This clarification from Axis Bank came a day after PNB made an acknowledgment of fraud transactions worth more than Rs 11,300 crore in its Mumbai branch.
An investigation against accused, Nirav Modi, a billionaire jeweller and companies associated with him is underway for allegedly falsely acquiring the LoUs to obtains loans from Hong Kong-based banks.