PSB stocks fall by 7% as PNB unearths fresh LoUs worth Rs 12.5 bn

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Bank stocks today fell by up to 7 per cent as investor sentiments remained weak amid fresh disclosures by scam-hit Punjab National Bank.

Bank of India shares slumped 7.18 per cent, IDBI 6.78 per cent, Indian Bank 3.66 per cent, UCO Bank 2.42 per cent on BSE.

The scrip of Bank of Maharashtra fell by 1.78 per cent, Bank of Baroda 1.63 per cent and Allahabad Bank 0.77 per cent.

"PNB issue continued to impact the PSU banks and its effect was seen in the broad market as well," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

"The banking index was the major culprit today, courtesy to yet another negative news flow with regards to PNB," said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.

Punjab National Bank (PNB) has said that the alleged fraud perpetrated by jewellers Nirav Modi and Mehul Choksi may be around $2 billion, over $204 million more than previously estimated.

In a late night filing to stock exchanges, the state-owned lender said that "the quantum of reported unauthorised transactions can increase by $204.25 million."

The bank had earlier put the defrauded amount at Rs 113.94 billion ($1.77 billion). Adding another Rs 13.23 billion would take this to Rs 127.17 billion.

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