In a dramatic turn of events, fugitive diamantaire Mehul Choksi, one of the main accused in the PNB loan fraud, has been arrested in Belgium. The arrest, made by Belgian authorities in Antwerp on April 12, 2025, is a major step forward in India’s pursuit of justice in one of its biggest banking scams.
Choksi, who had been on the run since 2018, was detained following India’s extradition request, reigniting hope among enforcement agencies that he will soon face trial back home. The mehul choksi pnb case had shaken the very core of India’s financial system, exposing alarming loopholes in banking protocols and corruption at multiple levels.
Mehul Choksi PNB Case: A ₹13,850 Crore Scam Unearthed
The mehul choksi pnb scandal came to light in early 2018, when Punjab National Bank (PNB) disclosed that it had been defrauded of over ₹13,850 crore. The fraud was orchestrated through the illegal issuance of Letters of Undertaking (LoUs)—a bank guarantee used to obtain short-term credit from overseas branches of Indian banks.
Mehul Choksi, along with his nephew Nirav Modi, allegedly conspired with corrupt PNB officials to issue over 1,200 LoUs without due authorization. These LoUs were kept off the bank’s core systems, ensuring they bypassed internal audits and checks. While they claimed the loans were for importing precious stones and pearls, investigations revealed that the money was siphoned off or laundered through a complex network of shell companies.
The PNB loan fraud severely impacted the credibility of public sector banks and led to stricter oversight and reform across India’s banking sector. The government and regulatory bodies were compelled to rethink mechanisms for early fraud detection and accountability.
From Escape to Extradition: The Mehul Choksi PNB Trail
Just days before the fraud was exposed, Mehul Choksi fled India in January 2018. In a well-planned move, he had obtained citizenship in Antigua and Barbuda in November 2017 under its Citizenship by Investment program. This strategic citizenship acquisition complicated India’s attempts to bring him back, as it triggered a long diplomatic and legal process.
While Choksi claimed he was being “persecuted” and alleged human rights violations if extradited, Indian agencies remained relentless. Over the years, Interpol issued Red Corner Notices, and multiple extradition requests were made to Antigua. However, Choksi remained elusive—until his recent arrest in Belgium.
According to reports, Choksi had traveled to Belgium for medical treatment. He was arrested at a hospital in Antwerp following a tip-off to Indian authorities. This arrest could signal the beginning of the end for his years-long evasion of justice.
Legal Drama Unfolds: Extradition to India a Real Possibility
Following the arrest, Indian agencies including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) are preparing the necessary paperwork to expedite his extradition from Belgium. Sources suggest that Choksi may also be deported if legal hurdles emerge in the extradition process.
Meanwhile, Choksi’s legal team is planning to file for bail, citing medical conditions. His lawyers argue that he poses no flight risk and should be granted relief. However, given the magnitude of the mehul choksi pnb scam and the damage caused to the Indian banking system, the pressure on authorities is immense to ensure his return.
India’s extradition request highlights Choksi’s alleged role in criminal conspiracy, cheating, breach of trust, and money laundering. The request is backed by volumes of evidence and testimony gathered over several years of investigation.
Impact of the PNB Loan Fraud on India’s Banking Sector
The PNB loan fraud has become a cautionary tale in India’s financial history. The fraud not only led to massive monetary losses but also caused an erosion of trust in public sector banking. Following the scam, PNB reported substantial quarterly losses and its stock price plummeted.
The Reserve Bank of India (RBI) swiftly moved to revise the norms for issuing LoUs and implemented stricter monitoring mechanisms. Banks across the country were directed to strengthen internal audits and cybersecurity systems to prevent similar frauds.
In a larger context, the scandal also prompted the government to fast-track legislation related to fugitive economic offenders. The Fugitive Economic Offenders Act, 2018, was introduced to empower authorities to seize the assets of those who flee the country to escape prosecution.
Public Reaction and Political Fallout
Public anger against Mehul Choksi, Nirav Modi, and corrupt banking officials was immediate and widespread. The case became a significant issue in political debates, with opposition parties blaming the ruling government for failing to prevent such large-scale fraud.
Activists and economists have pointed out the need for higher transparency in the banking system and the urgent requirement to insulate financial institutions from political and corporate interference.
What’s Next for Mehul Choksi and the PNB Case?
Now that Mehul Choksi is in custody, the path to legal closure seems more hopeful than ever. If the extradition is successful, Choksi will face trial in Indian courts along with co-accused Nirav Modi, who remains in a UK prison fighting his own extradition.
The recovery of defrauded funds and auctioning of seized properties related to Choksi’s companies are already underway. Indian agencies hope that bringing Choksi back will not only serve justice but also act as a deterrent for future financial crimes.
The mehul choksi pnb arrest marks a turning point in a case that had, until now, appeared frozen in international legal red tape. All eyes are now on the Belgian courts and how swiftly India can navigate the final hurdles to bring a fugitive billionaire home.
