Punjab National Bank saw 6.7% drop in its share price
Last updated on February 14th, 2023 at 11:46 am
On Friday, Punjab National Bank, India’s second largest lender saw 6.7% drop in its share price, which tumbled down to ₹34.60 on BSC as it reported its fourth loan fraud case in last three years. In its regulatory filing on Thursday, the state-run bank said that the fraud of ₹ 3,688.58 in the non-performing asset account of M/s Dewan Housing Finance Ltd. (DHFL) “at Large Corporate Branch” in Mumbai was reported to the Reserve Bank of India (RBI).
Post market hours, the bank released the statement saying,”A fraud of ₹ 3,688.58 crore is being reported by the bank to RBI in the accounts of the company (DHFL). Bank has already made provisions amounting to Rs 1,246.58 crore, as per prescribed prudential norms.”
In its regulatory filing undersigned by Company Secretary Ekta Pasricha, the bank said it has already made provisions pertaining to the fraud, amounting to Rs 1,246.58 crore. Many banks including State Bank of India and Union Bank of India had already declared DHFL a defaulter. Besides, the private bank IndusInd Bank also reported similar loan fraud.
The non-banking housing finance company is currently facing the bankruptcy proceedings. Following the defaulter chargers, the company’s promoters Kapil Wadhawan and Dheeraj Wadhawan were arrested by the Central Bureau of Investigation in April. Authorities are investigating DHFL promoters and its loan record to find out the extent of fraud. As per the reports, the company had total debt of Rs 97,000 crore and has allegedly taken out Rs 31,000 crore from the total bank loans.
In the past, PNB reported the infamous loan defaulter case of diamantaire Nirav Modi, which amounted to about Rs 14,000 crore loan fraud. Besides, the bank also reported a Rs 3,800 crore fraud loan by Bhushan Power and steel. In June, PNB reported gross non-performing assets – or bad loans of about Rs 73,500 crorefor the fourth quarter of financial year 2019-20. Out of the total loans, the bank’s percentage of gross NPAs was 14.21 per cent, against 15.5 per cent in the previous quarter.
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