Indian bank reports $1.8b fraud at single branch

Indian state-run Punjab National Bank (PNB) has detected some “fraudulent and unauthorised” transactions worth about $1.77 billion at one of its branches in Mumbai.

The PNB bank said on Wednesday that the transactions were “for the benefit of a few select account holders with their apparent connivance” and that “based on these transactions other banks appear to have advanced money to these customers abroad.”

Indian second-biggest state-run bank, fourth-biggest overall by assets, did not name the people involved with the transactions.

But the lender said it had reported the deals to law enforcement agencies and would evaluate later whether it faces any liability arising out of the transactions, reports Reuters.

“In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions,” PNB said.

The government owned bank is already dealing with other allegations of fraudulent transactions.

Last week, Indian federal agents said they had launched an investigation into billionaire jeweler Nirav Modi over accusations that he and others defrauded PNB of $44 million.

It was not immediately known if the latest disclosure on fraudulent transactions was related to or separate from the previous incident, the report says.

Four top PNB executives contacted by Reuters did not immediately respond requests seeking comment beyond the stock exchange filing.