Punjab National Bank on Thursday reported a loan fraud of Rs 3,688.58 crore in the account of Dewan Housing Finance Corporation. In a regulatory filing after market hours, the country’s third largest public sector bank, PNB, said the fraud in the non-performing asset account of DHFL “at Large Corporate Branch” in Mumbai was reported to the Reserve Bank of India (RBI). This is the fourth scandal Punjab National Bank has reported in three years. Non-banking financial company Dewan Housing Finance is in bankruptcy proceedings.
Punjab National Bank said it had already made provisions of Rs 1,246.58 crore pertaining to the incident.
State-run Punjab National Bank was hit by a Rs 11,300-crore fraud involving billionaire jeweller Nirav Modi in 2018.
Banking regulations require the provision on an account affected by fraud to be 100 per cent, made over four quarters.
Once one of the country’s top NBFCs or shadow lenders, DHFL accumulated total debts of almost Rs 1 lakh crore and then failed to honour dues to its creditors.
Authorities are investigating DHFL’s promoters and its loan book to determine the extent of any fraud.
Other banks including State Bank of India and Union Bank have also reported Dewan Housing Finance’s accounts as fraudulent.
Punjab National Bank in June reported about Rs 73,500 crore of gross non-performing assets – or bad loans – for the fourth quarter of financial year 2019-20. As a percentage of total loans, gross NPAs were 14.21 per cent, as against 15.5 per cent in the previous quarter.
Meanwhile, Punjab National Bank’s 19th annual general meeting is slated for August 4.