PNB detects $1.8 bn fraud, shares crash



Mumbai, Feb 15: Punjab National Bank (PNB), the second largest public sector bank in India, has detected a $1.8 billion fraud in one of its branches here, the bank said in a regulatory filing to the stock exchanges on Wednesday.



"The bank has detected some fraudulent and unauthorised transactions (messages) in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance," the filing by PNB earlier said.



It has put the quantum of such transactions at $1,771.69 million (around Rs 11,515 crore).



The amount of fraudulent transactions is equivalent to eight times the bank's net income of about Rs 1,320 crore ($206 million).



Following the regulatory filing, the bank's shares plunged drastically. It had closed the day's trade on Wednesday down 9.81 per cent at the BSE.



Meanwhile, Financial Services Secretary Rajiv Kumar confirmed to IANS that a Central Bureau of Investigation (CBI) probe has been initiated and that 10 PNB employees have been placed under suspension.



The fraud was detected in the PNB's Brady House Branch, in south Mumbai, which is its second-biggest lending branch in the country, official sources said.



The fraud, which includes money-laundering, concerns the Firestone Diamonds group in which the CBI last week booked billionaire diamond trader and designer Nirav Modi, his wife Ami, brother Nishal and a maternal uncle Mehul Choksi.



It followed a complaint lodged by PNB on January 29 pertaining to an alleged cheating case of Rs 280 crore perpetrated by the four aforenamed persons in 2011.



It is learnt from informed sources that that Nirav Modi wrote to PNB and other banks that he would return the outstanding money.



The latest case -- which involves a sum considerably higher than the Vijay Mallya default of around Rs 9,000 crore -- comes at a time when the Indian banking system is already grappling with swelling non-performing assets.



"Based on these transactions, other banks appear to have advanced money to these customers abroad. In the bank, these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions," the PNB's regulatory filing said.



The bank's filing added: "The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land."



Banking industry leader and former Vice President of the All India Bank Employees Association Vishwas Utagi said if this was the scenario of one company pertaining to just one branch of PNB, then the situation was "truly alarming."



"The CBI and other agencies must investigate all the members of PNB's Credit Approval Committee and the board of directors since such scams cannot take place without connivance at the top levels," Utagi told IANS.

IANS

Don’t Miss

Mama Choksi to close Gitanjali Gems? Employees asked to leave
New DON of world cricket..Kohli set to break this Bradman record
A whooping Rs 780000000= Salman Khan's fees
Jai Hindi..India fires deadly nuke missile, China Pak in range
Priyanka's revealing hot dress goes viral...netas upset
ICC ODI rankings: BIG news for Virat Kohli fans
Moody's, Fitch may downgrade $1.8 bn fraud-hit PNB
This Virat-Anushka adorable hug is going viral, see PIC
Tiff between producers and director of Kedarnath is affecting Sara Ali Khan's career
This cricketer's son commits SUICIDE!
Babus call mass strike, Kejriwal calls a crisis meeting
5 developments: Scuffle and slur war between AAP and bureaucrats
Shocking: Priyanka Chopra is coming back to Bollywood with this movie
BIG job opportunity in UP Electricity Board, salary up to Rs 86,000
Priya Prakash Varrier wants JUSTICE!
India successfully test-fires nuclear capable Agni-II
Nirav says can't clear dues, PNB action has destroyed my brand
Mamata Banerjee snubs BJP for boasting about its new office, suggests humility
Is BJP all set to snap ties with TDP? State unit hints so
CBI will not tell you how much is spent in bringing back Mallya and Modi
Trump Jr arrives in India; Indo-Pacific ties, realty projects on agenda
Rs 20,000 cr PNB scam news is false: Govt
Vasundhra announces death penalty for RAPISTS of minors
Zabardast..Super powerful Tab in just Rs 7000
Google will pay your bills now
Jai Ho..Alert driver takes burning train to safety, saves passengers
Shocking..Man on BMW masturbates before actress,hubby files complaint
Rahul gains Modi magic wanes in Gujarat civic polls
RaGa tears into NaMo..Why is chowkidar saheb silent on mama bhanja loot
PM Modi's GIFT..a Palace Queen Humsafar Express..Know train details

Most Recent

Most Popular