PSU Bank index rallied as much as 1.4 percent after losing more than 2 percent in morning.
Public sector banks shares recovered sharply from day's low to gain up to 4 percent intraday Wednesday, led by short covering. These shares had fallen up to 4 percent in morning after the increase in PNB fraud amount for the second time.
All PSU banks were in the green barring PNB. OBC and Bank of Baroda were biggest gainers among PSBs, rising 4 percent each.
PSU Bank index rallied as much as 1.4 percent after losing more than 2 percent in morning. In fact, Nifty Bank index also recovered from day's low, but were still trading mildly lower due to correction in ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank.
Punjab National Bank (PNB) has told the police on Tuesday that it has uncovered additional exposure of about Rs 942.18 crore (USD 145.27 million) to Asmi Jewellery of Gitanjali Group in connection with a massive alleged fraud, according to a court filing by the Central Bureau of Investigation.
This takes the Delhi-based lender’s total exposure to one of country’s biggest banking frauds up to Rs 13,640 crore from the earlier estimate of Rs 12,700 crore.
As investigations widen and unauthorized loans are uncovered, the bank has said that the total amount allegedly defrauded by the accused (Gitanjali Group) till date is about Rs 7,080.86 crore during the period 2013-17, according to the CBI filing. The investigating agency has requested permission for further investigation under The Prevention of Corruption Act.
Previously, PNB had pegged its fraud exposure to Gitanjali Group, controlled by Mehul Choksi, at Rs 6,138.28 crore, after addition of Rs 1,251.56 crore on February 22.Meanwhile, in a remedial action to the Nirav-Modi led Punjab National Bank fraud, now worth Rs 13,640 crore, the Reserve Bank of India (RBI) has discontinued use of LoUs or Letters of Undertaking and Letters of Comfort as trade credits.