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The Punjab National Bank: The Modi Fraud—System Failure or People Failure?

Lookup NU author(s): Dr Saurabh BhattacharyaORCiD


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In February 2018, Punjab National Bank (PNB) in India reported a US$1.8-billion fraud related to the illegal issuance of letters of undertaking. The fraud was engineered by one of the leading diamond jewellers of India, Nirav Modi; his uncle, Mehul Choksi; and employees of PNB’s Brady House branch in Mumbai. Indian investigative agencies found that the previous top management of PNB along with other employees had also been involved in or had prior knowledge about the fraud. PNB's current chief executive officer, Sunil Mehta, was trying to steer PNB out of the crisis. What key challenges did Mehta face with respect to managing the operational risks of PNB? Was Mehta right to consider the fraud a people issue and not a systems issue?

Publication metadata

Author(s): Agnihotri A, Bhattacharya S

Publication type: Online Publication

Publication status: Published

Series Title: Ivey Publishing

Year: 2019

Description: Business Case Study

Acceptance date: 07/03/2019

Publisher: Ivey Publishing

Place Published: London, OT, Canada