About ten employees of Punjab National Bank have been suspended following the bank detecting some fraudulent and unauthorised transations worth over Rs 11.36 crore.
A statement from the state-run bank said that these transations are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions.
So, there is a possibility that not all the funds in question may not turn out to be a liability. Still, chances are the bank may still see a substantial if not all, the benefits of the government's bank recapitalisation will be wiped off.
It may be recalled that the government has plans to issue bonds worth Rs 5473 crore to PNB as part of its plan to bolster balance sheets of ailing PSU banks.
According to reports, the Central Bureau of Investigation has received two complaints from PNB against jewellery designer Nirav Modi and a jewellery company about fraudulent transactions.
The allegations are being looked into and future course of action will be decided soon, says a source from the investigating agency. However, it has refused to share any further details as it may hamper the investigation.
The Punjab National Bank stock is down 7% at Rs 150.50, slightly off the day's low of Rs 149 (on BSE). From a 52-week high of Rs 231.60 it had touched in late October 2017, the stock is nearly down 30%.
The stock had spurted to that high, rising as much as 36% on 25 October 2017, riding on recapitalisation plans. A day earlier, the government had announced av Rs 2.11 trillion for PSU bank recapitalisation to revive investments as well as growth. As per the plan, Rs 1.35 trillion will be from the sale of recapitalisation bonds and the remaining Rs 76,000 crore through budgetary allocation and fundraising from the markets.
On BSE, the PNB counter has clocked a volume of nearly 3.16 million shares so far in the session, as compared to average daily volume of 1.27 million shares. On the National Stock Exchange, the counter has recorded a volume of about 44.8 million shares so far in today's session.
The fraudulent transactions are estimated to be about eight times the bank's net income of Rs 1302 crore in financial year 2016-17.