Mumbai: Markets regulator Sebi has issued a warning to scam hit Punjab National Bank (PNB) for failing to make timely disclosure regarding certain fraudulent transactions made by diamond trader Nirav Modi and his associates.
After carefully examining various events and disclosures made by the bank, the regulator said there was a delay of 1-6 days by PNB in making disclosure to the stock exchanges pertaining to filing of the reports or complaints with the Reserve Bank of India (RBI) and Central Bureau of Investigation (CBI).
Sebi further added that the public sector lender did not make any provisions or disclosures with respect to fraud of Rs 280 crore in the financial statements for the quarter ended December 2017, which is a clear violation of the Sebi (Listing Obligations and Disclosure Requirement) Regulations 2015.
“The aforesaid non-compliance are viewed seriously and PNB is hereby warned and advised to ensure compliance with all applicable provisions of the Sebi LODR Regulations,” the watchdog said in its warning letter.
In February this year, PNB informed stock exchanges that it has detected fraudulent and unauthorised transactions worth Rs 12,000 crore in one of its branches in Mumbai. According to it, a bank official fraudulently issued letters of undertaking (LOU’s) on behalf of some companies belonging to Nirav Modi group for availing buyers credit from overseas branches of Indian banks.
The bank reported its biggest ever-net loss of Rs 13,417 crore for the quarter ended March 2018 due to a four-fold increase in fresh provisions against bad assets.
