New Delhi, Mumbai: A day after high-level fraudulent practice to the tune of $1.8 billion (Dh6.6 billion) in one of the Punjab National Bank’s Mumbai branch was reported to the stock exchange, Sunil Mehta, MD and CEO said it “will not spare anyone” involved in the wrongdoing.

The Enforcement Directorate on Thursday launched a nationwide raid on the offices, showrooms and workshops of billionaire diamond trader Nirav Modi. ED teams carried out simultaneous raids on Modi’s in Mumbai, Surat (Gujarat) and New Delhi.

“We are known for clean banking. The fraud started in 2011. We have brought it under the notice of regulatory and law enforcement agencies as soon as we came to know about it. We will not spare anyone involved in the fraudulent practice,” Mehta told reporters here in hurriedly called press meet.

The PNB chief said the fraud was detected on January 25 and was reported to the investigative agencies, including the Central Bureau of Investigation on January 29.

He said he had received a “vague email” from the customers involved in the fraudulent transaction about settling the dues and the bank had asked them to send their detailed response. He said the transactions were detected in only one branch and no other branches were involved.

As for other banks, he said overseas branches of other Indian banks were affected by the transactions, except in one case. His answer was in response to a question whether any foreign bank branch was also affected.

The PNB chief said the finance ministry was taking stock of the matter on a day-to-day basis.

“We have the capabilities and capacities to come out of the situation,” he said.

“We have not only lodged the complaint against the culprits, we have also lodged complaint against our staff who were involved in the matter,” Mehta said.

Raid on jeweller’s offices

Footage broadcast on Indian television news channels showed officers entering one of Modi’s jewellery showrooms in the south of India’s financial capital.

The Press Trust of India (PTI) news agency reported that investigators searched around half a dozen locations in Mumbai, including Modi’s home, as well as stores in New Delhi and Surat.

A spokesman for the ED refused to comment when contacted by AFP.

Modi is one of India’s richest men. He is worth $1.73 billion according to Forbes, placing him 85th on India’s rich list.

The 47-year-old is the founder of jewellery giant Firestar Diamond. His high-end Nirav Modi brand has stores in several of the world’s major cities.

Thursday’s raids came a day after the ED registered a money laundering case against Modi and a few others, including members of his family and a business associate.

It followed PNB’s complaint last month to India’s Central Bureau of Investigation (CBI) that it had been defrauded of Rs2.8 billion.

The bank, India’s second-largest state-owned lender, announced on Wednesday that it had also detected fraud of almost $1.8 billion at a single branch in Mumbai, sending its shares plummeting.

It made fresh allegations against Modi to the CBI, according to PTI.

The news agency, citing officials, reported on Thursday that Modi had left India on January 1, before the bank detected either of the two fraud cases.

Modi has not commented on the allegations. Firestar Diamond has previously said the earlier case was not connected to the company.

In January, he was photographed alongside Indian Prime Minister Narendra Modi at the World Economic Forum in Davos. The two are not related.

The trouble comes as India’s government is trying to reduce the crippling debts of the country’s embattled lenders, including PNB.

It recently announced a $32-billion recapitalisation plan for state-owned banks to help them clean up their books.

PNB shares were down almost nine per cent in early afternoon trade Thursday.