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  Business   In Other News  14 Jun 2018  PNB falls below RBI’s Capital Needs

PNB falls below RBI’s Capital Needs

PTI
Published : Jun 14, 2018, 1:27 am IST
Updated : Jun 14, 2018, 1:27 am IST

The scam was perpetrated by way of fraudulent LoUs generated in the name of PNB.

Punjab National Bank
 Punjab National Bank

New Delhi: Punjab National Bank’s capital adequacy has fallen short of the regulatory requirement of RBI due to unprecedented loss in the fourth quarter of 2017-18 fiscal.

At the end of March, 2018, total capital ratio as per the Basel- III requirement declined to 9.20 per cent as against 11.66 per cent at the end of March 2017.

On consolidated basis, it slipped to 9.82 per cent as against 11.98 per cent during the same period.

As per the RBI’s norms, the total capital adequacy, including counter-cyclical buffer should be upwards of 11.5 per cent. So to that extent, there is shortfall as far as capital adequacy of PNB is concerned as on the March 31, 2018.

“...the capital position of the bank as at March 31, 2018 being below the regulatory requirement (including countercyclical buffer) of RBI, Hong Kong Monetary Authority is enhancing the Supervisory arrangements on our Hong Kong branch,” PNB said.

The erosion of capital can be primarily be attributed to over Rs 14,000 crore farud wherein billionaire jeweller Nirav Modi and associates had allegedly acquired fraudulent letters of undertaking (LoUs) from one of the branches of PNB for overseas credit.

Tags: punjab national bank, nirav modi, billionaire