PNB Uncovers ₹2,434 Cr Fraud

In a report to stock exchanges on 26 December 2025, Punjab National Bank (PNB) revealed a large ₹2,434 crore loan fraud connected to the former promoters of Srei Equipment Finance Ltd (SEFL) and Srei Infrastructure Finance Ltd (SIFL). The scam, which amounts to ₹1,240.94 crore in SEFL and ₹1,193.06 crore in SIFL, was discovered via forensic audits that exposed anomalies such as loans to related parties and possible evergreening. PNB has minimized the immediate financial impact by making 100% provisions for the entire exposure.

Market Reaction and Background

Investor worries over persistent fraud at the public sector institution caused PNB shares to drop more than 3% to about ₹116.6 on 28 December. Due to governance failures and defaults totaling ₹32,700 crore, the Srei firms entered insolvency in 2021 under RBI directives; NCLT approved their resolution plans, and National Asset Reconstruction Company Ltd (NARCL) took over in 2023. The forensic results have been contested by Srei promoters, who assert that the case is still pending.

Broder Context

The notorious ₹14,000 crore Nirav Modi-Mehul Choksi fraud, which involved forged Letters of Undertaking, struck PNB in 2018; therefore, this is not the bank's first significant crime. Other lenders, including Bank of Baroda and Punjab & Sind Bank, have already reported Srei-related frauds. In the midst of ongoing vigilance campaigns, regulators and investigators are expected to conduct additional investigations.