NEW DELHI – India’s second-largest state-run bank said on Wednesday it haddetected fraud of almost $1.8 billion at one of its branches, sending itsshares plunging more than seven per cent.
The Punjab National Bank (PNB), one of several state-owned lenders thegovernment is trying to clean up, said transactions worth $1.77 billion hadbeen made “for the benefit of a few select account holders with theirapparent connivance”.
It said they had occurred at a single branch in India’s financial capitalMumbai.
“Based on these transactions other banks appear to have advanced money tothese customers abroad,” the bank said, adding that the fraud had beenreported to enforcement agencies for further investigation.
PNB did not give any further details or say which lenders were affected.
*Bloomberg News* reported that the value of the illegal transactionsamounted to eight times the bank’s net income last year.
Shares in PNB plummeted 7.45 pc on the Bombay Stock Exchange’s benchmarkSensex index in late morning trade.
The news comes as the government tries to reduce the crippling debts ofIndia’s troubled lenders.
It recently announced a $32-billion recapitalisation plan for state-ownedbanks to help them clean up their books. – APP / AFP