PSB stocks continue to reel after PNB fraud case; drop as much as 10%

Investors continue to dump state-owned banks; Fraud weighs on overall markets as Nifty erases all 2018 gains

State-owned banks continued to reel under the multi-billion fraud at Punjab National Bank (PNB) with Nifty PSU Bank index dropping 2.5 per cent to a four-month low. The gauge for the performance of public sector banks (PSBs) has dropped 10 per cent since Monday when the Rs 114-billion fraud at the country's second-largest PSB came to light. Shares of at least a dozen PSBs have declined 10 per cent or more in the past one week, with PNB bearing the maximum brunt.

Its shares fell another 7.3 per cent on Monday, extending one-week fall to 28 per cent. The fraud has