Shares of state-owned lender Punjab National Bank on Monday recovered after an earlier fall, after it reported a loan fraud of Rs 2,434 crore last week, allegedly committed by former promoters of SREI Equipment Finance Ltd (SEFL) and SREI Infrastructure Finance Ltd (SIFL). 

PNB’s shares had fallen as much as 3.1 per cent to Rs 116.6 apiece earlier in the day, but were trading at Rs 120.55, up 0.15 per cent at 11:44 am.

The PSU lender reported the loan fraud of Rs 2,434 crore to the Reserve Bank of India, alleging in a regulatory filing that the erstwhile promoters of SREI Equipment Finance Ltd and SREI Infrastructure Finance Ltd committed frauds of Rs 1,240.94 crore and Rs 1,193 crore, respectively.

The bank has made 100 per cent provisions against the entire outstanding amount, the filing added. The RBI, in October 2021, superseded the boards of SIFL and its wholly-owned subsidiary SEFL.

However, Srei group has challenged the forensic audit report as the basis for the fraud classification, noting the matter is subjudice.

Other banks such as Punjab &Sind Bank, Bank of Baroda, and Union Bank of India have also earlier declared a loan fraud in connection with Srei companies.

SEFL and SIFL, which carried combined financial debt of about Rs 32,700 crore, went through resolution under the Insolvency and Bankruptcy Code and were acquired by National Asset Reconstruction Company Ltd in December 2023.

The PSU’s shares showed robust performance across YTD, 1‑year, 3‑year and 5‑year horizons up 17.43 per cent, 18.84 per cent, 117.60 per cent and 263 per cent respectively, despite a decline of 3.17 per cent in one month.

PNB reported a 14 per cent rise in standalone net profit to Rs 4,904 crore for the September quarter of FY26 up from Rs 4,303 crore a year earlier.