PNB shares tank 10% on Rs11,300 crore fraud transactions
New Delhi: Shares of Punjab National Bank (PNB) plunged 10% on after the public sector bank detected financial fraud of over Rs11,300 crore in one of its branches in Mumbai.
Other PSU banks too were under pressure and fell by up to 8% after the Reserve Bank of India (RBI) came out with new norms for recognizing stressed assets.
PNB shares settled at Rs145.20 on the NSE, a slump of 10.29% from its previous close. During intra-day trade, the scrip had touched a low of Rs145.15.
Similar movement was witnessed on the BSE, as the stock closed 9.81% lower at Rs 145.80. It had opened at Rs160 and soon touched an intra-day low of Rs144.70.
Following the decline in the counter, the market capitalisation of the company eroded by Rs3,844 crore to Rs35,365 crore.
In a regulatory filing to stock exchanges today, PNB said it has detected some fraudulent transactions with financial implication of $1.77 billion (about Rs11,335 crore), and the matter has been referred to law enforcement agencies for recovery.
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, PNB said.
Based on these transactions, other banks appear to have advanced money to these customers abroad, it said.
Among other banking counters, State Bank of India (SBI) declined 4.06% to end at Rs276.80. Bank of India lost 7.87%, followed by Allahabad Bank (7.79%), Oriental Bank of Commerce (7.43%), Canara Bank (5.82%), Syndicate Bank (4.49%), IDBI Bank (4.22%) and Bank of Baroda (1.75%).
“The PSU banking space was the party spoiler today as we saw massive cut in individual names within this basket. Going ahead, one needs to keep a close eye on this basket as follow-through selling may result in further dampness in the market,” said Sameet Chavan, chief analyst-technical and derivatives at Angel Broking.
On Monday after close of market hours, RBI came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC).