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Punjab National Bank slips 10% on detecting fraud of Rs 3,805 crore

PNB said on Saturday that Bhushan Power & Steel Ltd had misappropriated bank funds and had manipulated its books of accounts to raise funds from consortium lender banks.

SI Reporter  |  Mumbai 

Punjab National Bank, PNB

Shares of Punjab National Bank (PNB) slipped 10 per cent intra-day to quote at Rs 73 on the BSE on Monday after the state-owned bank reported a fraud of Rs 3,805 crore by Bhushan Power & Steel Ltd (BPSL).

On Saturday, the bank reported the fraud to the Reserve Bank of India (RBI) and informed that BPSL had misappropriated bank funds and had manipulated its books of accounts to raise funds from consortium of lenders.

“On the basis of the forensic audit investigation findings and CBI filing FIR, on suo moto basis, against the company and its directors, alleging diversion of funds from banking system, a fraud of Rs 3805.15 core is being reported by the bank to the RBI. In the accounts of the company (BPSL), the bank has already made provisions amounting to Rs 1,932.47 crore, as per prescribed prudential norms,” PNB said in a regulatory filing.

The public lender said that its domestic exposure to BPSL stood at Rs 3,191.51 crore and overseas exposure of $49.71 million (approx Rs 345.74 crore) at Dubai branch and $ 38.51 million (approx. Rs 267.90 crore) at Hong Kong branch.

At present, the case is at the National Company Law Appellate Tribunal (NCLAT) which is in advance stage and the bank expects good recovery in the account, it added.

At 10:23 am, the stock of PNB was trading 9 per cent lower at Rs 74, as compared to a 1 per cent decline in the S&P BSE Sensex. A combined 39 million shares have changed hands on the counter on the NSE and BSE so far.

First Published: Mon, July 08 2019. 10:25 IST
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