PNB hits 20-month low on discovery of additional unauthorized transactions

The stock slipped 9% to Rs 102 on the BSE in intra-day trade, its lowest level since June 24, 2016.

Shares of Punjab National Bank (PNB) hit a 20-month low of Rs 102, slipping 9% on the BSE in early morning trade, after the government-owned bank said it has revealed an additional unauthorized transactions by around Rs 13 billion (USD 204 million). The stock was trading at its lowest level since June 24, 2016.

This increase means that the total fraud now amounts to nearly Rs 127 billion ($2 billion) as against the original estimated Rs 114 billion ($1,772 million).

“In continuation to our filing with Stock Exchanges on 14.02.2018, we have to inform that quantum of reported unauthorized transactions can increase by USD 204. 25 Mio (approx),” PNB said in a regulatory filing.

The bank on February 14, 2018, had unearthed Rs 114 billion fraud allegedly involving billionaire jeweller Nirav Modi and associate companies. The fraud pertains to issuance of fake Letters of Understanding (LoUs) to companies associated with Modi by errant PNB employees that enabled these companies to raise buyers credit from international branches of other Indian lenders.

Since then, the PNB stock tanked 37% from Rs 162 on February 12, 2018, against 0.42% rise in the S&P BSE Sensex.

At 09:37 am; the stock was trading 7% lower at Rs 104 on the BSE, as compared to 0.08% rise in the benchmark index. A combined 26.66 million shares changed hands on the counter on the BSE and NSE so far.