Banking Shares Fall After Massive PNB Fraud Shock

The Logical Indian Crew

February 21st, 2018

Courtesy: Times of IndiaThe Economic Times, BSE India.

Shares of the banking sector are facing a continuous downfall since the Punjab National Bank (PNB) scam worth Rs 11,400 crore on February 14, 2018. Later, the stock prices were dropped by 4.6%  falling at Rs 111 counting a total five-day loss to 31 percent. It was reported that in these five sessions, over Rs 12,700 crore of shareholder wealth has been affected. Today, BSE opened with the good drop of 50 points in banking shares.   


Sensex ViewBSE India

The market valuation of PNB fell by Rs 10,938.78 crore to Rs 28,270.22 crore on February 20. Earlier, it stood at Rs 39,209.

According to the BSE shareholding pattern data, the government holds 57.04% stake in PNB, and with the rapid fall in stock prices, it has lost around Rs 6,274.4 crore. The famous insurance company, Life Insurance Corporation of India (LIC) has lost Rs 1,532.3 crore as it owns 13.93% stake in the bank. A holder of 12.56% stake, Foreign Portfolio Investors (FPIs) has seen an erosion of Rs. 1,381.6 crore and small investors have lost about Rs 387 crore.

Moreover, State Bank of India’s (SBI) shares lingered in the lower circuit of percent trading. Trading of other banking stocks also remained below by at least 10%; these banks include Allahabad Bank, UCO and Union Bank of India. SBI has lost around Rs 18,000 crore in market value while Bank of Baroda has seen an erosion of Rs 5, 634 crores.

Tax Department told Times of India (TOI), “Banks could take a hit of more than USD 3 billion from loans and corporate guarantees to diamond companies.”

Such fraud events have impeded the smooth functioning of the banks and their image. International rating agencies Moodys Investor Service and Fitch Ratings Fitch informed The Economic Times, “It will monitor PNB’s full liability, potential recoveries and the extent of additional fresh capital from both internal and external sources to determine if the bank’s financial position is no longer consistent with the current viability rating.”

Share your thoughts..

Related Stories

21 Public Sector Banks Lost Rs 25,775 Crores to Bank Frauds in FY 2017-18, Says RBI

Yes Bank Recovers Rs 184 Cr Of Rs 325 Cr After Tata Steel Acquisition Of Bhushan Steel

23,000 Loan Fraud Cases Of Rs 1 Lakh Crore Reported In Last 5 Years: RBI In RTI Reply

Another Case Of Bank Fraud: Chennai Based Jeweller Cheats Bank Of Rs. 824 Crore

About Rs 3 Lakh Crore Loans Of Banks ‘Irreversible’, Says PM’s Advisor Bibek Debroy

Bad Loans Rise By 135 Percent To Rs 614,872 Crore In Last Two Years

Latest on The Logical Indian

World Affairs

Nearly 2000 Children Separated From Their Parents At US-Mexico Border Due To Trump’s “Zero-Tolerance” Policy

Get Inspired

UP: Tea Seller’s Daughter Bags Rs 3.8 Crore Scholarship To Top US College

News

How A Rape Victim And Her Family Is Crushed By The ‘System’

Get Inspired

FIFA World Cup: Responsible Japanese Fans Clean Up Stadium After Their Team’s Win Over Colombia

Exclusive

“My Education Is Worthless, Everyone Asks Whether I Am Male Or Female,” Says Kolkata Trans-Woman Teacher

News

Nirav Modi Travelled Several Countries With His Revoked Passport, Says CBI