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Posted at: May 16, 2018, 12:51 AM; last updated: May 16, 2018, 12:51 AM (IST)

Fraud-hit PNB posts record loss of Rs 13,417 crore in Q4

Fraud-hit PNB posts record loss of Rs 13,417 crore in Q4

Tribune News Service

New Delhi, May 15

Scam-hit PNB on Tuesday posted a loss of Rs 13,416.91 crore for the January-March period (fourth quarter of FY18), the biggest ever by any domestic lender, mainly on account of high provisioning for bad loans.

The bank said after taking into account various outstanding amounts, its total liability in the Nirav Modi fraud works out to Rs 14,356.84 crore.

The Board of Directors has decided to divest the functional powers of two executive directors, KV Brahmaji Rao and Sanjiv Sharan, who were named in the CBI chargesheet filed in the fraud case.

In a communication, PNB said the fraud was detected at PNB’s Brady House branch in Mumbai under the gems and jewellery sector wherein, through apparent connivance between “these entities and few employees of the bank”, some LoUs/FLCs were issued fraudulently to certain overseas branches of Indian banks through misuse of the SWIFT messaging system.

The fraud allegedly perpetuated through Letters of Undertaking (LoUs)/Foreign Letter of Credit (FLCs) is currently being investigated by different agencies.

“The liabilities on account of LoUs/FLCs, which became due up to March 31, 2018 amounting to Rs 6,586.11 crore have been paid by the bank...,” the PNB said in a regulatory filing, while announcing its fourth quarter result.

It further said as a prudent measure, the bank has created liability in the books in respect of LoUs/FLCs which are becoming due after March 31 amounting to Rs 6,959.79 crore.

Biggest ever loss by any domestic lender 

  • The bank had reported standalone profit of Rs 261.90 crore in the fourth quarter of the preceding fiscal, 2016-17
  • It made a provision of Rs 7,178 crore for the loss incurred on account of Nirav Modi fraud, 50% of the total amount of Rs 14,356 crore in the fourth quarter of FY18
  • It has paid Rs 6,586.11 crore to other banks to discharge its liabilities towards LoUs and Foreign Letter of Credits (FLCs) issued fraudulently in Nirav Modi scam
  • Total income for the quarter also declined to Rs 12,945.68 crore from Rs 14,989.33 crore in the year-ago period


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