PNB may be given 1 yr to provision against Rs 12,646 cr fraud

The Reserve Bank may provide four quarters to Punjab National Bank (PNB) for making provisions against the country’s biggest ever banking fraud of Rs 12,646 crore allegedly masterminded by billionaire diamantaire Nirav Modi.

The bank has written a letter to the banking sector regulator seeking its opinion on making provisions for the fraud, sources said.

Although there is a direction of the RBI on provisioning to be made in case of loan fraud, the bank is taking pre-emptive action to deal with extraordinary situation created by unearthing of this mega fraud.

There is no precedence of fraudulent Letter of Undertaking (LoUs) issued earlier, so the RBI is likely to allow PNB to make provision against the fraud not exceeding over four quarters.


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