Fraud-hit PNB targets over 10% growth in FY19 to $180 billion, outlines steps to prevent frauds

will split the process of credit underwriting into four divisions with different employees focused on sourcing, appraisal, process and underwriting, documentation and disbursement, and recovery

Reuters May 07, 2018 09:17:14 IST
Fraud-hit PNB targets over 10% growth in FY19 to $180 billion, outlines steps to prevent frauds

New Delhi: Fraud-hit lender Punjab National Bank (PNB) said on Sunday it aimed to expand its total business 10.8 percent to 12 trillion rupees ($180 billion) in the year to March 2019 and outlined steps to prevent more such frauds.

The second-largest state-run bank in February disclosed that two jewellery groups had defrauded it of more than $2 billion by raising credit from overseas branches of other Indian banks using illegal guarantees issued by rogue PNB staff at a Mumbai branch over several years.

While investigation continues into what has been called the biggest fraud in India’s banking history, PNB said after a board meeting that it had strengthened the process of underwriting credit to minimise the possibility of fraud.

Fraudhit PNB targets over 10 growth in FY19 to 180 billion outlines steps to prevent frauds

Punjab National Bank. Reuters image.

The New Delhi-headquartered bank will split the process of credit underwriting into four divisions with different employees focused on sourcing, appraisal, process and underwriting, documentation and disbursement, and recovery, it said in a statement.

The bank will also rely more on an off-site monitoring mechanism and reduce its dependence on physical inspection and audit to identify risks, it added.

PNB has constituted a specialised stressed-assets management vertical for early identification of bad loans, the bank said.

India’s banks, already burdened by a 9.5 trillion-rupee soured-loan mountain as of last year, are staring at a further rise in bad loans after the central bank tightened rules earlier this year.

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