Mumbai: Punjab National Bank (PNB), the second largest public sector bank in India, has detected a $1.8 billion fraud in one of its branches here, the bank said in a regulatory filing to the stock exchanges on Wednesday.
“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,” the filing by PNB earlier said.
It has put the quantum of such transactions at $1,771.69 million (around Rs 11,515 crore).
The amount of fraudulent transactions is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).
Following the regulatory filing, the bank’s shares plunged drastically. It had closed the day’s trade on Wednesday down 9.81 per cent at the BSE.
Meanwhile, Financial Services Secretary Rajiv Kumar confirmed to that a Central Bureau of Investigation (CBI) probe has been initiated and that 10 PNB employees have been placed under suspension.
The fraud was detected in the PNB’s Brady House Branch, in south Mumbai, which is its second-biggest lending branch in the country, official sources said.
The fraud, which includes money-laundering, concerns the Firestone Diamonds group in which the CBI last week booked billionaire diamond trader and designer Nirav Modi, his wife Ami, brother Nishal and a maternal uncle Mehul Choksi.