PNB fraud fallout: Loan disbursements to corporate India take a hit

public sector banks have scaled down activities like extending trade credit, guarantees and letter of credit

Loan disbursals to India Inc are taking a hit at this crucial time of fiscal year end, as banks, especially public sector lenders, have turned defensive in the aftermath of the Punjab National Bank (PNB) fraud. The assessment of the impact of the new framework for restructuring of stressed assets is also taking bankers’ time.

Normally in March, last month of any financial year, activity levels are in high gear, said a top executive of a public sector bank. But now, the management of most banks, especially state-owned banks, which account for 70 per cent of banking in India, hardly have