In a significant development, the state-run Punjab National Bank (PNB) has flagged a major case of alleged loan fraud to the country's banking regulator. The case involves the former promoters of two Srei group companies and amounts to a staggering sum of ₹2,434 crore.
Details of the Alleged Borrowal Fraud
The bank officially informed the Reserve Bank of India (RBI) about this substantial financial irregularity. According to a filing made to the stock exchanges on Friday evening, PNB stated it had reported a borrowal fraud against the erstwhile promoters of Srei Equipment Finance Limited and Srei Infrastructure Finance Limited.
The breakdown of the alleged fraud amount is detailed. The case related to SREI Equipment Finance involves ₹1,240.94 crore. Meanwhile, the fraud amount linked to SREI Infrastructure Finance is reported to be ₹1,193.06 crore. Together, these sums form the total fraud value of ₹2,434 crore that has been reported.
Regulatory Compliance and Bank's Statement
PNB's disclosure was made in compliance with regulatory requirements. The bank cited the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as well as its own internal policy for determining material events that must be reported to the stock exchanges.
In its concise statement, the public sector bank said, "Pursuant to the applicable provisions of SEBI (LODFR) Regulations, 2015 and the Bank’s Policy for determining materiality of events... it is hereby informed that the bank has reported borrowal fraud to RBI against the erstwhile promoters of the below mentioned entities." This formal communication underscores the seriousness with which the bank is treating the incident.
Context and Potential Implications
This report adds another chapter to the ongoing troubles surrounding the Srei group companies. Both Srei Equipment Finance and Srei Infrastructure Finance were previously taken into insolvency proceedings by the RBI due to significant financial stress. The resolution process for these entities is currently underway.
The filing of this fraud report by a major public sector bank like PNB is expected to trigger further investigations by regulatory and enforcement agencies. It highlights the persistent challenges of corporate governance and loan accountability within the Indian financial system. The development may also impact the ongoing insolvency resolution process for the two Srei firms, as creditors assess the full extent of the liabilities.
As this is a developing story, more details regarding the nature of the fraud, the specific allegations against the former promoters, and the next steps by the RBI and other authorities are awaited. The case underscores the critical importance of robust risk management and due diligence in banking operations.
