Nehal Modi, the younger brother of fugitive businessman Nirav Modi, has been arrested in the United States in connection with the ₹13,000 crore Punjab National Bank (PNB) scam, one of the largest banking frauds in India’s financial history. His arrest follows an Interpol Red Corner Notice and multiple extradition requests made by Indian authorities, specifically the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI). He was taken into custody by US authorities on July 4 and is expected to appear for a hearing on July 17, where he may seek bail. However, prosecutors are reportedly preparing to oppose the bail request.
Nehal Modi's arrest marks a significant development in the PNB fraud case, which first surfaced in early 2018 and involved fake Letters of Undertaking issued by Punjab National Bank to firms associated with Nirav Modi and Mehul Choksi. These letters were used to fraudulently secure large overseas loans. While Nirav Modi is already in custody in the United Kingdom awaiting extradition, Nehal's arrest adds another layer to the international legal battle against those involved in the scam.
Born and raised in Antwerp, Belgium, Nehal Modi is fluent in English, Gujarati, and Hindi. He served as the director of Firestar Diamonds USA, a company that played a central role in the alleged movement and concealment of illicit funds. According to Indian investigators, Nehal Modi helped Nirav Modi launder the proceeds of the PNB fraud using a complex web of shell companies and overseas transactions. He was also connected to the Ithaca Trust, a financial entity reportedly used to acquire property and move money across borders on behalf of Nirav.
The ED and CBI have accused Nehal Modi of more than just financial assistance. He is alleged to have actively destroyed evidence and orchestrated efforts to conceal the extent of the fraud. In one reported instance, Nehal and a close aide of Nirav Modi, Mihir R Bhansali, transported around 50 kilograms of gold and a large amount of cash from Dubai following the public disclosure of the scam. Additionally, fake directors were allegedly instructed not to reveal Nehal’s involvement when questioned by authorities.
His involvement has been formally documented in the chargesheets filed by both Indian investigative agencies. The charges include money laundering under Section 3 of the Prevention of Money Laundering Act (PMLA), 2002, and criminal conspiracy under Sections 120-B and 201 of the Indian Penal Code, which pertains to conspiracy and destruction of evidence. The case built against Nehal is supported by documented financial transactions, testimonies from various individuals, and connections to companies and trusts under scrutiny.
The larger PNB scam, involving around ₹13,500 crore, was executed over several years and implicated multiple executives within the bank who helped process fraudulent guarantees. Nirav Modi and his uncle Mehul Choksi fled India in early 2018, just before the fraud was detected. Nirav Modi was arrested in March 2019 in the UK and has since been held in a London prison, fighting extradition to India. His extradition has been approved by UK courts but remains delayed due to multiple legal appeals.
Meanwhile, Mehul Choksi settled in Antigua and acquired citizenship there. He has faced legal challenges, including one in Belgium earlier this year where he was arrested in Antwerp at India’s request. His petition for release was rejected by a Belgian court, and he continues to face legal proceedings related to his role in the PNB scam and other financial irregularities.
The extradition of Nehal Modi, if successful, would be a critical win for Indian enforcement agencies, which have faced criticism over delays in bringing back high-profile economic offenders. His arrest in the US demonstrates growing international cooperation in tackling financial crimes that span multiple jurisdictions. It also puts a spotlight on the effectiveness of tools like the Interpol Red Corner Notice in global criminal investigations.
As the extradition process moves forward, the spotlight will remain on the outcomes of both Nirav Modi’s and Nehal Modi’s cases. Their prosecutions could pave the way for stronger financial regulation, improved banking oversight, and reinforced international legal frameworks to address transnational fraud and money laundering.
The next hearing for Nehal Modi, scheduled for July 17, is expected to focus on his bail plea and could indicate the trajectory of the extradition proceedings. With mounting evidence and growing global scrutiny, Indian authorities are hopeful that Nehal will be brought back to face justice alongside others involved in this massive banking scandal.
