BoI has Rs 200 cr exposure in PNB scam, initiates proceedings: CEO
State-owned Bank of India (BoI) has an exposure of Rs 200 crore in the Punjab National Bank fraud case and the public sector lender has initiated insolvency proceedings against Nirav Modi firms, said a top official of the bank.
State-owned Bank of India (BoI) has an exposure of Rs 200 crore in the Punjab National Bank fraud case and the public sector lender has initiated insolvency proceedings against Nirav Modi firms, said a top official of the bank. "We have some exposure (in the PNB fraud case). We are participating in the resolution process. It (exposure) was around Rs 200 crore. We are participating in the insolvency process in overseas also," Dinabandhu Mohapatra, Managing Director and CEO of BoI told PTI.
"Lets hope for the best," he said. Diamond merchants Nirav Modi and his uncle Mehul Choksi are alleged to have perpetrated the country's biggest banking sector scam of Rs 13,000 crore at Punjab National Bank, mainly by way of issuance of fraudulent Letters of Undertaking (LoUs).
The Centre has also intervened in the bankruptcy proceedings of Nirav Modi firms in the US to protect the interests of PNB.
Mohapatra said the bank's profitability was hit during the October-December quarter largely due to higher provisioning to some of the large accounts that were downgraded by the Reserve Bank.
During the Q4, the bank recovered about Rs 9000 crore of the non-performing assets (NPA) and was hopeful of better results during the current financial year, he added.
Bank of India reported a net loss of Rs 2,341.10 crore during the third quarter ended December 31, as provisioning for bad loans rose 72 per cent due to high NPA ratio.
NPAs grew to 16.93 per cent of the gross loans by end of December 2017 from 13.38 per cent from December end 2016.
Net NPAs were 10.29 per cent against 7.09 per cent.
Watch this Zee Business video here:
"We did well in June and September quarters (of last fiscal). Then in December quarter some accounts of March 17 were downgraded by the regulator (RBI). But during the quarter-Q4 we have recovered around Rs 9000 crore of NPAs that were downgraded during the inspection," he said.
"That's is a good sign. It will help us in managing NPA's position," he added.
According to him, BOI is one of the few banks which have 65 per cent of provisional coverage ratio.
He hoped that the situation will altogether be different as he sees reversal of provisioning of some major accounts.
"Q1 of the current fiscal will be much better in all fronts," he said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.