Hitting back at Nirav Modi’s claims that the public sector Punjab National Bank (PNB) closed all recovery options to their dues by going public, the bank on Thursday said it has followed lawful legal avenues to recover its dues.

PNB in a clarification to stock exchanges said, “We have followed lawful avenues available to us as per law of land to recover our dues.”

Further, in a letter issued to Nirav Modi on Thursday, Ashwini Vats, PNB’s General Manager, International Banking Division said Modi’s companies were getting the Letter of Undertakings (LOUs) issued illegally and in apparent violations of the Foreign Exchange Management Act (FEMA), sources said.

According to senior officials, Ashwini in its letter wrote, “You were getting LoUs issued illegally and in an unauthorized way through few bank officials. At no stage such facilities were extended by our bank to the three partner firms. When these illegal activities surfaced, they pointed out towards apparent violation of FEMA and money laundering aspect. As required by law, the bank was compelled to bring there activities to the notice of Law and Enforcement agencies which the bank did.”

Sources also said that the letter also stated that the offer to settle the dues made by Nirav Modi was not backed by an upfront amounts and timelines. “Your commitment and undertaking for sparing of the total liability was not backed by providing upfront amounts and timelines. However, should you have any concrete and implementable plan, do revert back,” the letter noted.

Earlier this week, in a letter to PNB, Modi had alleged that the banks overzealousness had shut the doors on his ability to clear the dues. Modi had also said that the amount he owed banks was less than Rs 5,000 crore and not what was publicised. He had also blamed the bank and its “anxiety to recover dues immediately”, despite repayment offer, has destroyed his business and restricted the bank’s ability to recover all the dues leaving a trail of unpaid debts.

Last Thursday, Sunil Mehta, chief executive office PNB said it will pursue recovery and has received some “vague offers” for repayment of money from jewellery designer Modi, whose companies are embroiled in conducting fraudulent transactions worth Rs 11,400 crore.

Mehta said, “Nirav Modi has not come out with any concrete plan to repay so far. But they’re coming out with some vague offers which are under examination.” Nirav Modi, in an email communication had reached out to the bank with a ‘vague plan’ to repay loans and the same is under examination. Mehta mentioned that the bank has asked Nirav Modi to submit a revised payment plan to help recover the cash routed through fraudulent transactions to some companies linked to him.

While Nirav Modi, the alleged mastermind of this fraud, flees across continents, leaving depositors who have to foot the bill for his extravaganza. PNB said in its letter that the issuance of LoUs in connivance with its bank officials was in violation of FEMA norms. In its notification to the exchange, PNB also sought to assuage the concerns of investors and customers about the impact of the fraud on the financials and operations of the bank. “We have enough assets/capital to meet any liability which is decided as per the law,” the bank said.

The bank had a capital adequacy ratio of 11.58 per cent as of December end. It will get an additional Rs5,473 crore as capital from the government in the quarter ending March. It also has huge real estate holdings that it plans to monetize. It also has joint ventures in the insurance and mutual funds space which it can completely or partially exit depending on its requirements.