BackPNB fraud: Bank stocks decline, shares of Union Bank, Allahabad Bank hit 52-week low
Shares of Union Bank of India, Axis Bank and Allahabad Bank ended lower on Friday on news that they might have exposure to the PNB fraud allegedly perpetrated by Nirav Modi
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New Delhi: Shares of Union Bank of India on Friday ended 1.50% lower after the lender said it has an exposure of Rs1,900 crore to the PNB fraud case.
During the day, Union Bank shares had slumped to its 52-week low on BSE. “We wish to inform you that the bank through our foreign branches has been taking exposure with Punjab National Bank (PNB) as counterparty under various letters of undertakings (LoU) issued through authenticated SWIFT message," Union Bank of India said in a late night filing to stock exchanges on Thursday.
Punjab National Bank had on 14 February said it has detected a Rs11,400 crore scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.
While PNB did not name the other lenders, besides Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on LOUs issued by PNB.
On Friday, shares of Allahabad Bank settled at Rs54.75, down 0.36% on BSE. During the day the stock had plunged to its 52-week low level of Rs53.10.
Axis Bank ended the day at ₹ 537.75, down 1.10%.
As the Enforcement Directorate conducted multiple searches at establishments linked to Modi, seizing diamonds, jewellery and gold worth Rs5,100 crore and sealing six properties, the finance ministry said recovery would be made and nobody would be spared.
PNB has already suspended 10 officers and referred the matter to CBI for investigation.
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