Business Companies 15 Feb 2018 PNB tanks 9 per cent ...

PNB tanks 9 per cent on Rs 11,400-crore scam

PTI
Published Feb 15, 2018, 11:56 am IST
Updated Feb 15, 2018, 12:06 pm IST
PNB stock opened at Rs 137, then hit a low of Rs 133.45, down 8.47 per cent over its previous closing price.
PNB has suspended 10 officers over the scam and referred the matter to CBI for investigation. (Photo: PTI)
 PNB has suspended 10 officers over the scam and referred the matter to CBI for investigation. (Photo: PTI)

New Delhi: Shares of Punjab National Bank on Thursday 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 fraud.

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 on Wednesday.

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

Also read: PNB fraud case: ED conducts multi-city raids on Nirav Modi showrooms

 

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, Allahabad Bank and Axis Bank 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.

Also Read: PNB says USD 1.8 bn fraud; Nirav Modi, 3 more jewellers under probe

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

 

Meanwhile, Axis Bank 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 fraud in India as its quantum was bigger than an estimated Rs 9,000 crore scam at erstwhile Satyam Computers.

...
Location: India, Delhi, New Delhi




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
-->