PNB shares tank 10%; other banks slide by 8%

New Delhi: Shares of Punjab National Bank (PNB) plunged 10% on Wednesday after the state-run bank detected financial fraud of over Rs 11,300 crore in one of its branches in Mumbai.

Other PSU banks were under pressure too and fell by up to 8 % after the RBI came out with new norms for recognising stressed assets.

The stock of PNB settled at Rs 145.20 on the NSE, a slump of 10.29% from its previous close. During intra-day trade, the scrip had touched a low of Rs 145.15. Similar movement was witnessed on the BSE, as the scrip closed 9.81% lower at Rs 145.80. It had opened at Rs 160 and soon touched an intra-day low of Rs 144.70.

Following the decline in the counter, the market capitalisation of the company eroded by Rs 3,844 crore to Rs 35,365 crore. In a regulatory filing to stock exchanges on Wednesday, PNB said it has detected some fraudulent transactions with financial implication of $1.77 billion (about Rs 11,335 crore), and the matter has been referred to law enforcement agencies for recovery.

The bank has detected some fraudulent and unauthorised transactions (messages) in one of its branches in Mumbai for the benefit of a few select account holders with their apparent connivance, PNB said.

Based on these transactions, other banks appear to have advanced money to these customers abroad, it said.

Among other banking counters, SBI declined 4.06% to end at Rs 276.80. Bank of India lost 7.87%, followed by Allahabad Bank (7.79%), Oriental Bank of Commerce (7.43%), Canara Bank (5.82%), Syndicate Bank (4.49%) and IDBI Bank (4.22%). On Monday, RBI came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code.