One of country’s leading the Punjab National Bank, which was hit by a massive fraud earlier this year on Tuesday reported Rs 13,417 crore loss in the fourth-quarter. The bank reported such a huge loss after the organisation was hit by bad loans lendings. A couple of months back, PNB had made public about Rs 1,200 crore fraud involving diamond tycoon Nirav Modi, after his businessman couldn’t repay bank the loan due on his organisation. It was even before the fraud became public, Nirav Modi along with his family had escaped the country and the authorities are still unable to trace his location.
PNB had disclosed that two jeweler groups had defrauded it costing the bank a loss of $2 billion, raising credit overseas with fake guarantees issued by rogue PNB staff. Ever since the PNB has been hit by these two massive scams, the law enforcement authorities have been raiding Nirav Modi’s properties and assets in the nation to recover as much amount to minimise the impact of the fraud. Meanwhile, PNB on Monday charged around 22 people in relation to the case which also included a former head of the bank and two current directors. Reports suggest that there will be more people who may be charged in bad loan cases.
The lender, which has been allowed by the central bank to spread the fraud-related provisions over four quarters, said it would make the remaining Rs. 7,178 crore of provisions due to the fraud in the three quarters that began on April 1. Speaking in the matter, Head of research at IDBI bank, AK Prabhakar while speaking on PNB’s loss said that loss was not surprising given the scale of the fraud. He also said that the worst was not over as the full-write-off was yet to be done.For all the latest Business News, download NewsX App