Punjab National Bank Reports Nearly $1.8 Billion Fraud At A Mumbai Branch

| February 14 , 2018 , 13:22 IST

Punjab National Bank, the second-biggest state-run bank of India, in a letter to the Bombay Stock Exchange on Wednesday, reported that it has detected fraud of $1.77 billion at a single branch in the financial hub of the nation, Mumbai.

In the letter, the Bank reported that it detected some "fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance."

The Bank added, "Based on these transactions other banks appear to have advanced money to these customers abroad."

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Within hours of the report, shares of the Punjab National Bank fell as much as 7.5 percent, poised for the steepest drop since October. Although the Bank did not name the persons involved, it did add that the details had been reported to law enforcement agencies.

The fraudulent transactions reported are equivalent to approximately 8 time the bank's 2017 net income of $206 million, exchange filings showed.

According to analysts, the fraud is likely to create a challenge for Punjab National Bank Chief Executive Officer Sunil Mehta who took charge last May, a year after the Bank and 12 other lenders were fined for violating rules on foreign-exchange deals.

So far, it is unclear whether the Mumbai fraud is related to the other case of fraud reported by PNB earlier this month, regarding billionaire jeweller Nirav Modi.

View the Punjab National Bank report below:

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