Punjab National Bank which had been in “hot waters” post-Nirav Modi scam has reported a loss of Rs 13,416.91 crore for the January-March period which is being considered the biggest loss to have ever reported by a domestic lender till date.
PNB has posted a standalone profit of Rs. 261.90 crore in the fourth quarter for preceding fiscal 2016-17. In the context of the provisions of the loss made on account of the scam, the bank said it provided for Rs 7,178 crore, 50 percent of the total amount of Rs 14,356 crore in the fourth quarter of 2017-18.
The state-owned bank has also offloaded Rs 6,586.11 crore to other banks to discharge its liabilities towards Letter of Undertakings (LoUs) and Foreign Letter of Credits (FLCs) that were issued fraudulently to certain branches of Indian bank via misuse of SWIFT not being integrated with CBS.
The provisions for the bad loans have seen a four-fold jump to Rs 16,202.82 crore for the quarter under review compared to Rs 4,910.39 crore parked aside in the same period a year ago.
The Net NPA’s for the bank have also soared to 11.24 percent against 7.81 percent year ago. In gross terms, NPA of the bank surged to Rs 86,620 crore in the fourth quarter as compared to Rs 55,370 crore in the same quarter a year ago.
Meanwhile, the bank is initiating on several steps from its end to reduce its dependence on human intervention as revealed in the financial statement of the bank.
It further said, “The bank plans to rely on artificial intelligence (AI) for a reconciliation of accounts and incorporate analytics for improving audit systems. Further, the internal audit process is also being augmented to give higher weight to the off-site monitoring mechanism and reduce dependence on physical inspection and audit to identify risks.”
Additionally, PNB has also gone a 4 way split for loan operations to ensure proper checks and balances. It has created a focused off-site centre focused on monitoring all foreign exchange business.