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PNB tanks 9% on Rs 11,400-crore scam

Press Trust of India  |  New Delhi 

Shares of today extended its fall for the second straight session, falling as much as 9 per cent in morning trade after the lender said it has detected a USD 1.77 billion

The stock opened at Rs 137, then hit a low of Rs 133.45, down 8.47 per cent over its previous closing price.

On the NSE, the stock opened at Rs 137.60, then fell 8.57 per cent to Rs 133.35.

This is the second consecutive day of decline for the stock. It had slumped 10 per cent yesterday.

The said it had detected a USD 1.77 billion (about Rs 11,400 crore) in which billionaire allegedly acquired fraudulent letters of undertaking (LoUs) from one of its branches for overseas credit from other Indian lenders.

PNB has suspended 10 officers over the scam and referred the matter to CBI for investigation.

While PNB did not name other lenders, Union Bank of India, and are said to have offered credit based on LoUs issued by PNB.

An LoU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.

Consequently, shares of Union Bank of fell 1.85 per cent and shed 5.6 per cent.

Meanwhile, was trading on the green and touched a intraday high of Rs 554.30, up 1.90 per cent on reports that it has sold all the referred transactions with respect to PNB's LoUs.

This could be the biggest banking in as its quantum was bigger than an estimated Rs 9,000 crore scam at erstwhile Satyam Computers.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 15 2018. 11:35 IST