PNB seen posting huge Q4 loss due to $2 billion fraud, NPAs

PNB seen posting huge Q4 loss due to $2 billion fraud, NPAs

In the fourth quarter, the bank's gross domestic business grew 7.8 per cent on annual basis over the corresponding period a year ago to Rs 10.31 lakh crore, PNB said in a statement. Supplementary chargesheets against Nirav will also be filed soon, they said.

The CBI today filed chargesheet against billionaire jeweller Mehul Choksi and 17 other entities, including companies owned by him and other individuals, in connection with the over 2 billion United States dollars Punjab National Bank (PNB) scam.

"Their capital is very low, and a bank needs it to sustain growth", said Yuvraj Choudhary, an analyst at Mumbai brokerage Anand Rathi, who said PNB's reported loss was more than triple his estimate, calling it a "major concern".

The CBI on Monday filed its first chargesheet in the matter detailing the roles of Nirav Modi, his brother Nishal Modi and Subhash Parab, an executive in Nirav's company. PNB's CASA (current account savings account) deposits increased to Rs 2,63,247 crore and its share in overall deposits was 43.85 per cent in March 2018, it said. Officers said then deputy manager of PNB, Brady House branch, Gokulnath Shetty had allegedly obtained illegal gratification from Choksi's company, in exchange for issuing fraudulent Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs).

Earlier this month, the daily had reported that the Bankruptcy Court for the Southern District of NY had asked a global professional services firm, Alvarez and Marsal, to investigate the circumstances surrounding the alleged Rs 13,000 crore bank fraud involving the diamantaire-turned-fugitive.

The remaining provision of Rs 7,178.42 crore will be made during the first three quarters of the ensuing financial year. It will also need to make higher provisions for non-performing assets following a Reserve Bank of India (RBI) diktat on quick recognition of bad debts that has adversely affected the results of other lenders as well.

The public sector major on Tuesday had reported a net loss, after closing hours of the stock markets, of Rs 13,417 crore for quarter ended March, against a net profit of Rs 262 crore for the corresponding quarter in 2016-17. In a document dated May 10, Kartik Radia, Partner & Head - Business Advisory Services at BDO, declared that the three companies Firestar Diamond Inc, A. Jaffe Inc and Fantasy Inc that have filed for bankruptcy in NY received at least around $46 million (Rs 312.4 crore) in remittances from PNB since 2011, the time when Modi's fraudulent activities are believed to have commenced.