PNB plunged 14% to Rs 126 in intra-day trade today, extending its Wednesday’s 10% decline, after the state-owned bank yesterday disclosed that it has detected some fraudulent transactions with a financial implication of $1.77 billion (about Rs 113.46 billion) and the matter has been referred to law enforcement agencies for the recovery. The stock finally settled 12% lower at Rs 128 on BSE, as compared to 0.41% rise in the S&P BSE Sensex.
According to media reports, the Enforcement Directorate (ED) is conducting searches at the residences of Nirav Modi and 11 other locations in Mumbai and Delhi in connection with the Rs 2.8 billion fraud of PNB allegedly by Modi and others. CLICK HERE TO READ FULL REPORT
The BSE said the Exchange has sought clarification from PNB with respect to news
article appearing on moneycontrol
on February 15, 2018 titled "ED raids offices of Nirav Modi, PNB and Gitanjali gems". The reply is awaited.
Gitanjali Gems locked in lower circuit of 20% at Rs 46.90 on BSE with no buyers were seen on the counter. The trading volumes on the counter surged seven-fold with a combined 30.32 million shares changed hands on BSE and NSE. There were pending sell orders for 159,188 shares, the stock exchanges data shows.
Meanwhile, Nifty PSU Bank index ended 1.1% lower today, has fallen 5.8% in past two trading sessions, the Reserve Bank of India (RBI) has come out with a revised framework for resolution of stressed assets on February 12, 2018.
The revised framework aims at creating a structure for banks which will provide early warning signals for stressed accounts and prompt reporting of default. The framework will enable lenders to take timely action for resolution of the stressed accounts and provides for adequate disclosures by banks while putting provision for penal action on banks in case of concealing of any information by banks, CARE Rating said in a note.
While CARE Ratings expects this framework is a positive in the long term, in the medium term this banks will see a spike in their Non-Performing Assets (NPA) over the next couple of quarters.