PNB Share Price Under Pressure After Rs. 2,434 Crore Fraud Case Comes to Light Linked to SREI Group

Punjab National Bank (PNB) shares are experiencing selling pressure on Monday, December 29, after the public sector lender disclosed a Rs. 2,434 crore loan fraud case on December 26th involving former promoters of SREI Group companies.

After the announcement on Friday, the PNB share price this morning opened 3% lower, touching an intraday low of Rs. 116.60 on the stock exchanges.

What Is the Rs. 2,434 Crore PNB Fraud Case?

In an official regulatory filing, Punjab National Bank informed that it has reported a borrowal fraud of Rs. 2,434 crore to the Reserve Bank of India. The fraud involves loans availed by two SREI Group companies: SREI Equipment Finance Ltd, which borrowed Rs. 1,240.94 crore, and SREI Infrastructure Finance Ltd, which borrowed Rs. 1,193.06 crore.

However, PNB clarified that it has already made full provisioning for the entire outstanding loan amount related to both SREI accounts. This means the bank has already accounted for the potential loss in its financial books. The PNB fraud case is not expected to impact future profits, as the exposure has already been covered.

SREI Companies Already Resolved Under Insolvency Process

PNB also stated that both SREI Equipment Finance and SREI Infrastructure Finance were successfully resolved under the Corporate Insolvency Resolution Process (CIRP).

The resolution was carried out under the supervision of the National Company Law Tribunal, which means the insolvency proceedings are already complete and the cases are closed from a legal standpoint.

PNB Share Price Performance

Despite the negative sentiment, PNB stock slowly recovered from the early loss. At the time of writing, PNB shares were trading around Rs. 120.04, marginally lower by 0.27%. So far in 2025, PNB shares have gained 16.93%.

PNB Q2 Financial Results (FY 2025-26)

Punjab National Bank (PNB) delivered a mixed performance in the second quarter of FY 2025-26. During the quarter, PNB's revenue declined 3.5% quarter-on-quarter (QoQ). However, on a year-on-year (YoY) basis, revenue still managed to grow 4.5%. The bank showed discipline on the cost front, with expenses falling 3.8% QoQ. On a YoY basis, expenses increased 5.1%. The biggest positive surprise came from profitability. PNB's net profit surged 136.3% QoQ, and on a YoY basis, net profit also rose 8.1%. For Q2 FY 2025-26, PNB reported an EPS of Rs. 4.46.

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