Multi-national financial institution, Punjab National Bank on Wednesday quoted that it had detected some unauthorised and fraudulent transactions worth $1.77 billion(11400 crore) in one of its branches in Mumbai.
Because of the incident, the bank’s share price slipped to 9.7 percent within a day. India’s second biggest state lender and fourth largest by overall assets, PNB has market capitalisation of Rs 36,000 crore and 2.55 percent of total loan book of Rs 4.5 lakh crore. The fraudulent amount transaction is close to its total market capitalisation.
The bank however, does not mention the name of the people involved, but have informed about the same to the law enforcing agencies and would evaluate later whether it faces any liability arising out of the transactions.
PNB without giving much details said,
“In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions. The matter was already referred to law enforcement agencies to examine and book the culprits as per law of the land. The bank is committed to clean and transparent banking. ”
With the share price falling so quickly in such a high rate, investors lost nearly Rs 3,000 crore of money on single day.
PNB, however is not new to such allegations and transactions and has filed two complaints against billionaire jewellery designer Nirav Modi and a jewellery company about fraudulent transactions.
Not only this, in February the bank reported to have better asset quality improved, in spite of having lower than expected earnings for December quarter.
There is no clue that if the current fraud is related to any of previous complaints or not.