Punjab National Bank: LoU the key to the unfare

Punjab National Bank was started their operation on April 12 1895 in Lahore. PNB was one of the most largest public sector back in India .Nirav  Modi is the director of Punjab National Bank. In  2018 February we all are witnessed a big scam that happened in the PNB around 11400 crore transacted  through unauthorised and fraudulent manner.

           PNB scam is a case of financial fraud done by Nirav Modi with the assistance of senior PNB officials colluded with the bank by obtaining LoUs without submitting any securities. The impact of the scam is very huge. In February 14 the scam was determined after further investigation as its Mumbai's Brady branch. After detailed investigation found around of 100 LoUS (letter of Undertaken) issued without any collateral security. Later PNB became victim of the fraud and faced the problem amounting around 11400 crores.

          Punjab National Bank scam affected adversely on all  banking sector industry. Foreign investors lost their confidence and trust in the public sector banks due to this. The scam was occurred due to the poor management of bank and failure in  auditing. Auditors fail to detect any frauds that took place in PNB. After this the Government of India took many policies to  overcome such frauds that happening in the banking sector.

Article by

Tisha Shaji 

The Key to Financial Freedom: How to Make Your Money Sweat for You

 

People claim that making money is really difficult and they go after it like a donkey chasing carrot.

 

" The rich don't work for money, they make the money work for them"

 

I'll now demonstrate how young people can become wealthy and thus enable you to appreciate the beauty of finance. I'm going to go over some ideas to make you understand the concept which I indent to disclose.

 

Compounding simply refers to the increasing value of an asset due to the interest earned on both a principal and accumulated interest.

 

Annuity is a series of payments made at regular intervals. Future value of annuity is among the best financial loopholes . How future value of annuity can be calculated is demonstrated in the illustration inserted.

 

Below is an example that explains how future value of an annuity works in real life:-

 

Just imagine that on your birthday, your family buys you a cake and other gifts, and you happily enjoy them. However, if you set aside ₹ 2000 from your birthday celebration each year to invest, the following amounts can be obtained by investing at various ages by the time you reach retirement.The illustration will help you to understand the magical effect of compounding.

To clarify the previously mentioned numbers. An amount of ₹ 1,46,87,715  can be secured if a person invests ₹ 2,000 per year on their birthday starting at the age of 20 and with a total investment of ₹ 80,000  ( 2,000 per year for 40 years).

The amount ₹1,46,87,715  comprises of the  capital amount ₹ 80,000 and interest amount 

₹ 1,46,07,715.

 

Therefore, simply by analysing the numbers, you would realise that by the time you reach retirement age, you will be a crorepati.

 

Thankyou.

 - Ujwal Unnikrishnan