Moneycontrol
Last Updated : Feb 16, 2018 12:24 PM IST | Source: PTI

Bank stocks tank; Union Bank, Allahabad Bank touch 52-week low

While PNB did not name the other lenders, besides Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB

 
 
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Shares of Union Bank of India today declined more than 3 per cent in morning trade after the lender said it has an exposure of Rs 1,900 crore to the PNB fraud case. The stock fell 3 per cent to touch an intra-day low of Rs 116.50, which was also its 52-week low level, on BSE. The stock slumped to its 52-week low level of Rs 116.50 on NSE as well, down 3.07 per cent over its previous close.

"We wish to inform you that the bank through our foreign branches has been taking exposure with Punjab National Bank (PNB) as counterparty under various Letters of Undertakings (LoU) issued through authenticated SWIFT message," Union Bank of India said in late night filing to stock exchanges.

State-owned Punjab National Bank on February 14 said it has detected a Rs 11,400 crore scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.

While PNB did not name the other lenders, besides Union Bank of India, llahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.

Shares of Allahabad Bank also fell to the 52-week low level of Rs 53.10, and Axis Bank fell 1.23 per cent to an intra-day low of Rs 537.05 on BSE today. Meanwhile, the BSE Bankex was also trading in the negative and fell to a low of 28598.89 points, down 133.47 points in morning trade today.

Besides, Kotak Bank, Federal Bank and IndusInd Bank and heavyweights like State Bank of India and ICICI Bank were also trading with losses. A fortnight after the scam was first reported, PNB Chairman and Managing Director Sunil Mehta yesterday said it has the capability to recover the dues from Nirav Modi and promised to take action against all wrongdoers.

As the Enforcement Directorate conducted multiple searches at establishments linked to Modi, seizing diamonds, jewellery and gold worth Rs 5,100 crore and sealing six properties, the finance ministry said recovery would be made and nobody would be spared.

PNB has already suspended 10 officers and referred the matter to CBI for investigation.
First Published on Feb 16, 2018 12:15 pm
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