PNB Reports Loan Fraud Of Over Rs 2,400 Crore
The state-owned lender has made provision for the entire outstanding amount.
Punjab National Bank on Friday said it has reported fraud of over Rs 2,000 crore to the Reserve Bank of India against the erstwhile promoters of two entities.
This includes a loan account of SREI Equipment Finance Ltd. for a fraud of Rs 1,241 crore and SREI Infrastructure Finance Ltd. of Rs 1,193 crore. The state-owned lender has made provision for the entire outstanding amount, according to a stock exchange filing.
The companies were successfully resolved under Corporate Insolvency Resolution Process by the National Company Law Tribunal.
SREI Infrastructure Finance entered the segment in 1989 as a construction equipment financier. After the successful implementation of the Resolution Plan of National Asset Reconstruction Co. (NARCL) by the NCLT in August, 2023, the board was reconstituted, according to the company's website.
The insolvency proceedings against the SREI Group NBFCs were initiated in October 2021, under orders from the RBI. The central bank had superseded the boards of SIFL and SEFL, citing governance concerns and repayment defaults of approximately Rs 28,000 crore.
PNB's provisions as of September quarter stood at Rs 643 crore, higher on both year-on-year and quarter-on-quarter basis.
Provision Coverage Ratio (including TWO), a key banking metric showing how much of a bank's Non-Performing Assets (NPAs) are covered by its provisions, improved by 24 bps on Y-o-Y basis to 96.91% in the second quarter.
Shares of Punjab National Bank settled 0.5% lower at Rs 120.35 on the BSE, ahead of the disclosure, compared to a 0.4% fall in the benchmark BSE Sensex. The stock is up 17% year-to-date.
