Incidentally, Nirav's last major public appearance was at the World Economic Forum in Davos, Switzerland, where he was part of a delegation of Indian businessmen and corporate leaders that accompanied Prime Minister Narendra Modi.
Kejriwal's remarks came after media reports suggested that the billionaire diamond trader left India before a FIR could be filed against him by the Punjab National Bank.
According to the modus operandi which was described in a PNB caution notice to the chiefs of 30 Indian banks, a junior employee had issued letters of undertaking, essentially guarantees, on behalf of some Nirav Modi group companies without entering the same in the bank's books. "It is derogatory, scandalous and demeaning", the law minister said.
PNB filed a complaint with the Central Bureau of Investigation late last month alleging that Mr Modi and companies linked to him fraudulently acquired PNB guarantees worth 100 billion rupees (S$2 billion) that they later used to obtain loans from overseas, said a source who asked not to be identified.
When PNB was about to expose the scam, Nirav Modi & Co. smelled the crackdown and left India.
While PNB has said it will honour its commitments, it did not clarify whether it will bear the entire liability, pointing out that the matter is under investigation.
The bank said the fraudulent transactions appeared to benefit a handful of customers.
The Enforcement Directorate (ED) today conducted searches in multiple properties linked to billionaire jewellery designer Nirav Modi in Mumbai, Delhi and few other cities and seized diamonds, jewellery and gold worth Rs 5,100 crore, agency officials said.
The stock price of Punjab National Bank fell a massive 13% and closed at 127 points, only 2 points above its 52-week low.
It was obvious that the fraud was undertaken to avoid immediate detection, and all the conmen needed was time, to get out of India with their treasure.
The premises of a senior bank official was also searched.
India's banks have been coping with a surge of bad loans, or non-performing assets, and the government recently announced a $14 billion recapitalization plan.
Stating that the central government is watching the development on a day to day basis, he said that it is committed to clean up the system.
"PNB has the capability and capacity to overcome this crisis". The top PNB official, however, refrained from providing details as the investigations were going on.
Mehta further said the bank will honour all its bonafide commitments. PNB shares closed down nearly 12% on Thursday.