What is LoU, which was faked for Nirav Modi's $1.7 bn fraud?
A Letter of Undertaking (LoU) is an assurance given by one bank to another to meet a liability on behalf of a customer. Hong Kong branches of multiple Indian banks allegedly gave $1.77 billion to Nirav Modi-linked firms based on PNB's fake LoUs. PNB may have to take the liability of these fake guarantee letters if Nirav's firms don't repay.