Fraud-hit PNB hammered by largest ever quarterly loss for an Indian bank

The state lender reported a $1.98b loss as it books provisions to cover a massive fraud.

Reuters reports that state-run Punjab National Bank reported a $1.98b (134.17b rupee) net loss in Q4 as it scrambles to book provisions in its bid to cover a massive fraud that took place at the bank.

The loss representing the biggest ever by an Indian lender. PNB set aside a higher-than-required $1.06b (71.78b rupees) in the three months to March 31, or half of the total $2.12b (143.57b rupees) it owes other banks for the illegal guarantees. That led to a more than tripling of its total provisions from a year earlier to $3b (203.53b rupees).

The fallout comes as PNB disclosed in February that two jewelery groups had defrauded the lender of more than $2b after rogue PNB staff issued fake guarantees to raise overseas credit.

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The police have already charged 22 people including a former head of PNB and two of its executive directors in what has been dubbed as the country’s largest banking fraud in history.

Here’s more from Reuters.