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New Delhi: Punjab National Bank (PNB), one of the country’s largest public sector banks, on Friday said it has reported loan frauds worth ₹2,434 crore to the Reserve Bank of India (RBI), involving former promoters of SREI Equipment Finance Limited (SEFL) and SREI Infrastructure Finance Limited (SIFL).
In a regulatory filing, PNB said the fraud related to SEFL amounted to Rs 1,240.94 crore, for which the bank has made 100 per cent provisioning for the outstanding exposure.
The filing further stated that the fraud amount linked to SIFL stood at Rs 1,193.06 crore, and the bank has fully provided for its exposure to the company as well. Both SEFL and SIFL have been successfully resolved under the Corporate Insolvency Resolution Process (CIRP).
PNB said the resolution was carried out by the National Company Law Tribunal (NCLT) in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
PNB disclosed the development after market hours. The bank’s shares closed 0.6 per cent lower at Rs 120.25 on the NSE on Friday.
According to the SREI Group’s website, SREI Infrastructure Finance entered the industry in 1989 as a financier of construction equipment. However, the company faced insolvency proceedings in October 2021.
Earlier, the RBI had superseded the boards of SREI Infrastructure Finance Limited and SREI Equipment Finance Limited, citing governance failures and repayment defaults amounting to nearly ₹28,000 crore. Following the NCLT’s approval of the National Asset Reconstruction Company’s (NARCL) resolution plan in August 2023, the boards of the two companies were reconstituted.
Punjab National Bank’s provisions stood at ₹643 crore as of the September quarter, higher than both the previous year and the preceding quarter. The bank reported an improvement in its provision coverage ratio, including technical write-offs, which rose by 24 basis points to 96.91 per cent in the second quarter compared to the previous year—a key metric closely tracked by analysts to assess asset quality.
PNB had earlier rocked the nation in 2018 after disclosing a massive fraud at its Brady House branch in Mumbai, initially pegged at ₹13,500 crore and later revised to approximately ₹13,850 crore. The scam involved jeweller Nirav Modi and his uncle Mehul Choksi, the former managing director of Gitanjali Gems, and remains one of India’s biggest banking scandals.
