On Friday, Punjab National Bank, India’s second-largest state-run lender that has been gone through a chain of new scandals, declared it had set aside about 17 billion rupees ($226 million) for a scam connected to an insolvent shadow financier.
On Thursday, the bank announced the 36.9 billion rupee fraud in the accounts of Dewan Housing Finance Corp. It had verified it rendered 12.5 billion rupees, and then reviewed the figure in a Friday filing.
Dewan Housing is a financier caught by the regulator in November as India climbed up attempts to hold a brewing shadow banking emergency. Also, in June, Punjab National Bank informed about 735 billion rupees of gross bad loans for the quarter ended March 31 -14.21% of total advance down from 15.5% the earlier quarter.
This is the fourth scandal Punjab National Bank is accusing of in three years. In 2018 it asserted it was duped of $2 billion by a jeweller who plotted with bank officials.
Managing Director S.S. Mallikarjuna Rao had stated in June the lender is removing a backlog of provisions and expects to post net income in every quarter of the financial year started April 1. He also told Punjab National Bank is looking to cement more prudential measures to avoid possible fraud.