Only retail operations are said to remain operational at the Brady House branch.
Reuters reports that embattled state lender Punjab National Bank (PNB) has moved to close nearly all its operations at a Mumbai branch which was at the heart of a $2b fraud often touted as the country's largest.
Big client accounts parked at PNB’s Brady House branch will be reportedly moved out to larger corporate branches for tighter oversight, sources told Reuters.
The Brady House branch has a foreign exchange department and handles mainly mid-sized corporate accounts. It also has a small retail operation, which will reportedly stay open after the restructuring.
PNB was hit by a massive scandal after rogue staff issued fake bank guarantees between 2011 to 2017 to help Indian diamond magnate Nirav Modi and Mehul Choksi raise billions in foreign credit. A Moodys' report notes that the bank needs around $1.76b to $1.91b (INR120-130b) in external capital just to meet minimum 8% Basel III CET1 ratio by March 2019.
“The bank's weak earnings profile — as seen by its large stock of nonperforming loans (NPLs) and the associated credit costs — will limit its ability to absorb the impact of the fraudulent transactions over the next 12-18 months,” Moody’s added.
Here’s more from Reuters:
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