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Published: Wed, May 16, 2018
Economy | By Melissa Porter

PNB posts a whopping net loss of Rs 13417 crore in Q4

PNB posts a whopping net loss of Rs 13417 crore in Q4

PNB's latest loss compared with a net profit of 2.62 billion rupees a year ago, and was higher than a 53.67 billion-rupee loss it reported in the March 2016 quarter that had been the highest in India's banking sector. She was the managing director of PNB until May 5 past year.

The CBI on Monday filed a chargesheet against Allahabad Bank MD and CEO Usha Ananthasubramanian and 21 others, including 11 bank officials, in the over Rs 13,000 crore Punjab National Bank fraud case in which diamantaire Nirav Modi and his uncle Mehul Choksi were allegedly involved. The loss is much higher than the Street estimates.

Gross bad loans as a percentage of total loans jumped to 18.38 percent at end-March from 12.11 percent three months earlier and 12.53 percent a year ago. The bank has made a 50 per cent provisioning against the fraud. The stock exchanges had asked a query from the bank asking if its CEO was charged by CBI in the PNB fraud. The agency alleged that the proceeds of buyer's credit availed from overseas banks on the basis of LoUs of the PNB were dishonestly and fraudulently diverted to pay off the oustanding liabilities of the three accused firms, directly and indirectly controlled by Nirav Modi.

The pain on this account is not yet over for the bank: the bank is making the remaining provision of ₹7,178.42 crore during the first three quarters of FY19 in keeping with the RBI's directive. The government holds a little over 62 per cent stake in PNB and close to 65 per cent in Allahabad Bank.

An LoU is a guarantee given by an issuing bank to Indian banks having branches overseas to grant short-term credit to the applicant. Gokulnath Shetty, who was the deputy manager at PNB's Brady House branch, allegedly continued to issue fraudulent LoUs for seven years even after being warned by the RBI.

India's Punjab National Bank (PNB) is all set to announce its fourth quarter results today.

They said the present charge sheet, filed in a special court in Mumbai, primarily deals with the first FIR registered in the case relating to the fraudulent issuance over Rs 6,498.20 crore worth of LoUs to Diamond R US, Solar Exports and Stellar Diamonds.

"Bank will make payments to the concerned banks on the due dates of LoUs/FLCs". The February 12 circular from the RBI scrapped six stressed non-performing asset (NPA) restructuring mechanisms such as Corporate Debt Restructuring, Strategic Debt Restructuring (SDR), Scheme for Sustainable Structuring of Stressed Assets (S4A) and Framework for Revitalizing Distressed Assets, Joint Lenders Forum and the 5/25 loan scheme, among others.

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