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5d ago

PNB Reports Rs 2,434 Crore Borrowal Fraud Tied to Former SREI Promoters

The state-run lender says the exposure is fully provisioned, signaling no fresh hit to quarterly earnings.

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PNB clarified that it has already made a 100 per cent provision for the entire outstanding amount in both accounts.
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Overview

  • PNB notified the Reserve Bank of India of a borrowal fraud linked to the erstwhile promoters of SREI Equipment Finance and SREI Infrastructure Finance.
  • The bank detailed exposure of Rs 1,240.94 crore to SEFL and Rs 1,193.06 crore to SIFL.
  • PNB stated it has made 100% provisions for the entire amount, which it says should limit immediate impact on reported profits.
  • The fraud classification follows forensic reviews reported to have flagged related-party fund diversion and loan evergreening.
  • SREI’s two entities were resolved under the IBC with NCLT approval and were acquired by NARCL in December 2023 after the RBI had superseded their boards in October 2021.