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PNB fraud: What India's biggest sham transaction means for banking sector?

The government recently extended a $14 billion bailout to ailing state banks as part of a broader $32 billion rescue plan


India’s Punjab National Bank, the second-biggest state-run lender, stunned the country’s financial sector when it announced this week it had discovered fraudulent transactions worth $1.77 billion at a single branch in Mumbai. The fraud, by far the biggest ever detected by an Indian bank, comes to light at a time when lenders - especially the state-run banks - are hobbled by $147 billion in soured loans on their books, a problem that has choked new lending and hurt the country’s economic recovery. Despite tight fiscal conditions, the government recently extended ...

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First Published: Fri, February 16 2018. 07:17 IST