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Banking Shares Fall As PNB Fraud Impact Deepens

NEW DELHI – The banking shares on Monday fall as worries intensify about fallout from a Rs 11,300 crore fraud at state-run lender Punjab National Bank (PNB).

At 12:01 pm, shares of the country’s second largest lender were trading down as much as 7 per cent on the BSE Sensex after the Central Bureau of Investigation (CBI) sealed the bank’s Mumbai branch.

Three people including two employees of PNB, the country’s second largest state lender, have been arrested in the biggest fraud case in the country’s banking history.

The agency is also questioning Vipul Ambani, the Chief Financial Officer of diamantaire Nirav Modi’s Fire Star diamond company.

The shares of State Bank of India (SBI) also remained in the lower circuit with trading low as much as 4 per cent. Other banking stock like Allahabad Bank, UCO and Union Bank of India were also seen in red with trading below as much as 10 per cent.

Banks could take a hit of more than $3 billion from loans and corporate guarantees to diamond companies, tax department said.

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