New Delhi, April 14, 2025 – Fugitive diamond trader Mehul Choksi, accused in the ₹13,000 crore Punjab National Bank (PNB) loan fraud case, has been arrested in Belgium following extradition requests made by Indian investigative agencies. Official sources confirmed the development on Monday, marking a significant breakthrough in India's efforts to bring back economic offenders.
As per agency report, Choksi was apprehended in Belgium where he had traveled for medical treatment. Since fleeing India in 2018, he had been residing in Antigua. The arrest follows a coordinated move by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), who shared two open-ended arrest warrants—issued in 2018 and 2021 by a special court in Mumbai—with Belgian authorities.
Open-ended warrants have no expiry and remain valid until either the accused is arrested or the court revokes them. Indian officials confirmed that after his arrest, formal documentation is underway, and Choksi may seek bail on medical grounds. His lawyer, Vijay Aggarwal, stated that Choksi is currently in jail in Belgium and can only file an appeal, not a direct bail application. The defense may argue on humanitarian grounds, citing his serious medical condition and ongoing cancer treatment, as well as concerns about jail conditions in India.
Choksi, along with his nephew Nirav Modi—also a key suspect—has been facing charges of orchestrating a massive bank fraud in collusion with some PNB officials. The fraud involved the illegal issuance of Letters of Undertaking (LoUs) and foreign Letters of Credit (LCs) from the bank's Brady House branch in Mumbai, bypassing standard procedures and internal systems.
Investigations revealed that a total of 165 LoUs and 58 LCs were fraudulently issued between March and April 2017, facilitating the encashment of 311 bills. These instruments allowed Choksi’s companies to secure foreign credit without having any approved borrowing limit registered with the PNB’s core banking system. This helped the entities evade scrutiny and repayment accountability.
LoUs act as guarantees issued by an Indian bank on behalf of a client to a foreign bank. If the client defaults, the Indian bank becomes liable. Based on the fraudulent LoUs, loans were obtained from several foreign branches including State Bank of India in Mauritius and Frankfurt, Allahabad Bank in Hong Kong, Axis Bank in Antwerp, Bank of India in Antwerp, and Canara Bank in Manama.
Following the default on repayments, PNB was forced to settle ₹6,344.97 crore, including interest, with the foreign banks. The ED, as part of its money laundering probe, has seized or attached assets worth ₹2,565.90 crore belonging to Choksi.
Meanwhile, Nirav Modi remains in custody in a London prison, fighting his extradition to India. He was detained in 2019 on the basis of India’s legal request and continues to be prosecuted under British judicial procedures.
The arrest of Mehul Choksi is being seen as a significant step forward in India’s campaign to bring fugitive economic offenders to justice and underscores the government's intensified efforts under international legal cooperation mechanisms.
