PNB reports Rs 2,434 crore borrowal fraud linked to former SREI promoters to RBI - The Economic Times
Punjab National Bank (PNB) has informed the Reserve Bank of India about a suspected loan fraud amounting to ₹2,434 crore, allegedly connected to former promoters of SREI Infrastructure Finance and SREI Equipment Finance. According to regulatory disclosures, the bank classified the account as fraud after identifying serious irregularities in fund usage and repayment patterns. The case involves borrowings extended over several years, during which the companies reportedly diverted funds and failed to meet repayment obligations. PNB stated that it has already made full provisions for the exposure, reducing financial risk to the bank. The matter has also been reported to investigative agencies, and legal action is expected to follow. This development comes amid ongoing scrutiny of large corporate defaults in India’s banking sector. The RBI has been actively encouraging banks to promptly identify and report fraud cases to strengthen transparency and accountability. The incident highlights continued challenges faced by public sector banks in managing corporate credit risks.
The Key points
- PNB reported a ₹2,434 crore borrowal fraud to RBI
- Fraud linked to former promoters of SREI group companies
- Accounts classified as fraud after internal investigation
- Alleged fund diversion and repayment failures identified
- Exposure relates to SREI Infrastructure and SREI Equipment Finance
- PNB confirmed full provisioning against the loan amount
- Bank’s financial impact already absorbed
- Case reported to enforcement and investigative agencies
- Legal proceedings expected to move forward
- Incident underscores ongoing corporate lending risks in India
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