The “biggest bank loot scam in 70 years” in independent India happened in one of the largest Public Sector Bank that had trembled entire banking sector. Punjab National Bank (PNB) India’s second largest public sector bank released a disaster on Valentine's Day i.e. 14th February 2018 by revealing a scam of Rs.11,400 crore directed by one of the country's richest businessman of the diamond, Nirav Modi. He ranked 85th on Forbes’s 2017 list of India’s richest people. Nirav Modi had directed and executed the scam with the support of Deputy Manager of PNB Mumbai branch named Gokul Nath Shetty and clerk Manoj Kharat. Modi and his Uncle Mehul Choksi schemed with these two people. They had facilitated the issuance of unauthorized LOU (Letter of Undertaking) to Modi and his company without following an appropriate procedure. The post scam had impacted shares of PNB by evaporating the market capitalization value worth of Rs.8000 crore due to that the entire banking sector was under shocking waves. Whistleblower had transcribed to the Prime Minister’s Office (PMO) at 2016, notifying the government for the “biggest bank loot scam in 70 years” but no prompt action was taken by the government. The scam showed a disappointment on the part of PNB and regulatory bodies in strongly managing the risk, which gave the motivation to critically examine the PNB Scam.

Key-words: Punjab National Bank, Scam, Whistleblowing, Letter of Undertaking, Risk exposure, Market Capitalization