State-run lender reports ₹270.57-crore worth loan fraud by Odisha-based firm to RBI; stock down 10% YTD

Punjab National Bank (PNB)'s shares will be in focus during Wednesday's trading session after the leading state-owned lender reported a loan fraud of ₹270.57 crore by an Odisha-based private company named Gupta Power Infrastructure Ltd to the Reserve Bank of India (RBI) on Tuesday, February 18.

PNB said in a regulatory filing to the stock exchanges that it has reported a borrower fraud of ₹270.57 crore to the central bank in the Gupta Power Infrastructure Ltd's non-performing asset (NPA) account. The loan was given by the bank's Station Square branch in Bhubaneswar. According to prescribed prudential norms, the bank has made provisions amounting to ₹270.57 crore.

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PNB Q3 Results

For the December quarter, PNB posted a more than twofold jump in net profit to ₹4,508 crore, up from ₹2,223 crore in the same quarter a year ago. The lender's total income increased to ₹34,752 crore from ₹29,962 crore in the same period a year ago. Interest income also rose to ₹31,340 crore from ₹27,288 crore in the same quarter a year ago.

On the asset quality front, the bank's gross NPAs ratio moderated to 4.09 per cent from 6.24 per cent a year ago. The net interest income (NII) increased to ₹11,032 crore in Q3 FY25 from ₹10,293 crore in Q3 FY24, showing an improvement of 7.2 per cent, said PNB MD and CEO Ashok Chandra.

Also Read: PNB Q3 Results: Net profit soars 103% YoY to ₹4,508.21 crore, asset quality improves; stock jumps 5%

Similarly, net NPAs, or bad loans, decreased to 0.41 per cent from 0.96 per cent at the end of the third quarter last fiscal year. As a result, bad loan provisions decreased significantly to ₹318 crore during the quarter from ₹2,994 crore a year ago.

With regard to recovery from the technically written-off account, Chandra said the bank aims to double its recovery target to about ₹1,600 crore in the fourth quarter. PNB shares are down over 10 per cent year-to-date (YTD), and the stock settled 1.45 per cent lower at ₹91.85 apiece on the BSE.

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