Nehal Modi, brother of fugitive diamantaire Nirav Modi and a key accused in the ₹13,500-crore Punjab National Bank (PNB) scam, was arrested by US authorities in New York on Friday. The arrest was made in connection with an extradition request filed by Indian agencies, the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), sources confirmed. Officials familiar with the matter said the US Department of Justice has assured Indian authorities that it will oppose Nehal Modi’s bail application when it is heard in court on July 17. The move marks a significant step forward in India’s efforts to bring all accused in the massive banking fraud to justice.

Nehal Modi is alleged to have played a central role in laundering proceeds from the PNB scam, orchestrated primarily by his brother Nirav Modi and their associate Mehul Choksi. The trio is accused of using fraudulent Letters of Undertaking (LoUs) issued by PNB to siphon off vast sums of money to fund their diamond businesses abroad. Both Nirav Modi and Mehul Choksi were earlier arrested on India’s extradition requests. Nirav is currently lodged in a UK prison, while Choksi was held in Belgium after being located in the Caribbean. Both are facing Red Corner Notices issued by Interpol and have been denied bail pending the outcome of their extradition proceedings. The PNB scam, which came to light in early 2018, triggered a major scandal in the Indian banking sector and prompted several reforms in the issuance and regulation of LoUs and international credit guarantees. With Nehal Modi now in US custody and extradition proceedings underway, Indian authorities are hopeful of bringing all accused back to face trial in India.