New Delhi, Feb 15 Punjab National Bank (PNB) has detected fraud transactions totaling over Rs 11,300 crore at its Mumbai branch, which is eight times of the state-run lender’s net profit.
The bank said it has referred the matter to the law enforcement agencies for investigations.
The lender said it faces a contingent liability with regard to letters of undertaking (LoU) issued to billionaire jeweller Nirav Modi from a branch in Mumbai to secure overseas credit from other Indian lenders.
Addressing a press conference, MD and CEO of PNB Sunil Mehta said the bank will take action against the wrongdoers in the fraud case, which started in 2011.
“The bank has detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance. Based on these transactions other banks appear to have advanced money to these customers,” PNB said in a regulatory filing to the stock exchanges on Wednesday.
It further 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 quantum of transactions is about USD 1.77 billion (over Rs 11,300 crore). It is eight of the bank’s 2016-17 net profit of Rs 1,324 crore.
PNB has suspended 10 officers over the fraud and referred the matter to the CBI for investigations.
“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,” PNB said.
Now, the matter has come under the scanner of several agencies like CBI and Enforcement Directorate, markets regulator Sebi and stock exchanges.
PNB shares continued to dive for the second consecutive, ending with a sharp decline of 12 per cent at Rs 128.35 apiece on BSE today. Yesterday, it plunged by 10 per cent.