PNB defrauded of Rs 3805 crore, stock crashes 11 per cent
Punjab Nation Bank in its exchange filing on Friday said that it has reported fraud worth Rs 3,805.2 crore by Bhushan Power & Steel Ltd. The fraud includes domestic exposure of Rs 3,191.51 crore at the PNB's Chandigarh branch, overseas exposure of Rs 345.74 crore at its Dubai branch and Rs 267.9 crore exposure at its Hong Kong branch.
Although the account was already NPA in its books, the bank has so far only made provisions amounting to Rs.1932.47 crore, which is nearly half of the amount of the NPA. As this amount is a fraud, the bank is likely to make provision for the rest of the amount too in the near term. This development is a major concern for the government-owned bank, which had already faced fraud by Nirav Modi worth ~Rs. 11,356 crore.
The bank further said that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks.
With this negative development, the stock of PNB took a beating and fell as much as 11 per cent to touch intra-day low of Rs. 72.50 on the BSE. The stock settled for the day at Rs. 72.65.