Punjab National Bank (PNB) on Friday informed the Reserve Bank of India (RBI) about a borrower fraud amounting to approximately ₹2,434 crore involving former promoters of SREI Equipment Finance Ltd and SREI Infrastructure Finance Ltd, according to a regulatory filing.
The state-owned lender clarified that both SREI entities have already been successfully resolved under the Corporate Insolvency Resolution Process (CIRP) as approved by the National Company Law Tribunal (NCLT).
Of the total fraud amount, ₹1,241 crore pertains to the loan account of SREI Equipment Finance Ltd, while ₹1,193 crore relates to SREI Infrastructure Finance Ltd. PNB said it has made full provisions for the outstanding exposure linked to both accounts.
PNB Share Price Reaction
PNB disclosed the fraud after market hours on Friday. The bank’s shares closed 0.50% lower at ₹120.35 on the BSE.
Asset Quality Improves Despite Fraud Disclosure
In a separate filing earlier this month, PNB highlighted continued improvement in asset quality. The bank’s gross non-performing assets (GNPA) declined to ₹40,343 crore as of September 30, 2025, from ₹47,582 crore a year earlier, aided by higher recoveries, account upgrades, and lower fresh slippages.
During the first half of FY26, PNB recovered ₹3,909 crore from NPAs—₹2,105 crore through cash recoveries and ₹1,804 crore via upgrades to standard assets. The bank also wrote off ₹3,201 crore in H1FY26, significantly lower than ₹8,061 crore in the corresponding period last year.
Fresh slippages stood at ₹3,136 crore in H1FY26, marginally lower than ₹3,159 crore recorded in H1FY25. PNB said sustained focus on recoveries and collections is expected to further strengthen asset quality and reduce pressure on provisioning and profitability.
Earlier this month, Brickwork Ratings reaffirmed the bank’s Basel III Additional Tier-1 bond rating at BWR AA+/Stable.
About Punjab National Bank
PNB is among India’s top three public sector banks by business size. As of September 30, 2025, it operated 10,228 domestic branches and two overseas branches, with 63.3% of its network located in rural and semi-urban areas.
