Punjab National Bank (PNB) has uncovered a massive borrowing fraud worth about Rs 2,434 crore involving the former owners of SREI Equipment Finance (SEFL) and SREI Infrastructure Finance (SIFL).
Details of the fraud
The fraud at SEFL amounts to roughly Rs 1,240.94 crore, while the loss at SIFL is about Rs 1,193.06 crore. PNB says it has set aside 100 % of these amounts as provisions, meaning the bank has fully accounted for the potential loss.
How the cases were resolved
Both companies were placed under the Corporate Insolvency Resolution Process (CIRP) and were later settled by the National Company Law Tribunal (NCLT). The insolvency proceedings began in October 2021 after the RBI stepped in over governance concerns and missed repayments of nearly Rs 28,000 crore.
Market reaction
PNB announced the news after trading hours. The bank’s shares closed slightly lower the next day, down about 0.6 % at Rs 120.25 on the NSE.
What investors should note
- PNB has fully provisioned for the fraud, so the impact on its earnings is already reflected.
- The resolution of SEFL and SIFL removes the immediate legal risk for the bank.
- Investors may see only a modest short‑term dip in PNB’s share price.
Remember, this is just an overview, not a prediction. Do your own research before making any investment decisions.