Comments
Fraud-hit Punjab National Bank (PNB) on Tuesday reported a net loss of whopping Rs 13,420 crore in the fourth quarter ended March 31, 2018.
The bank had reported a net profit of Rs 262 crore in the same quarter last year and Rs 231 crore in the October-December 2017 period.
For the full year 2017-18, PNB reported a standalone net loss of Rs 12,130 crore against a net profit of Rs 1,325 crore in the previous year.
The latest bottomline performance in the fourth quarter was hit by the part provision of Rs 7,178.42 crore that the bank made for the Nirav Modi perpetrated fraud.
The pain on this account is not yet over for the bank with the public sector lender opting to make remaining provision of Rs 7,178.42 crore during the first three quarters of 2018-19 in terms of RBI’s dispensation.
Although RBI allowed PNB to make provisions against the fraud at 25 per cent without debiting “other reserves” and provide the remaining amount during the first three quarters of ensuing financial year, PNB has made higher than required provision at 50 per cent amounting to Rs 7,178.42 crore.
The total amount involved in the Nirav Modi perpetrated fraud for which provisions were required stood at Rs 14,356.84 crore.
“We decided to go in for 50 per cent provisioning as we wanted to clean up the balance sheet to the maximum extent possible in 2017-18 itself”, said a PNB official.
For the first time in recent decades, PNB has reported an operating loss at Rs 447.38 crore in the fourth quarter. Part of the reason is the additional liability arising from enhancement in gratuity limits for employees from Rs 10 lakhs to Rs 20 lakhs with effect from March 28. The bank had charged Rs 63.45 crore during the quarter ended March 31, 2018 and deferred Rs 190 crore to subsequent three quarters of 2018-19.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.