PNB Reports ₹270 Crore Borrowal Fraud to RBI, NPA Case Under Scrutiny

PNB ₹270 Crore Fraud: Key Highlights

• Punjab National Bank (PNB) has reported a ₹270.57 crore borrowal fraud to the Reserve Bank of India (RBI).
• The fraud is linked to M/s Gupta Power Infrastructure Limited, classified as a Non-Performing Asset (NPA).
• The state-run lender has fully provisioned for the fraud amount as per RBI norms.
• PNB’s gross NPA (GNPA) ratio has improved from 6.24% in Dec 2023 to 4.09% in Dec 2024.
• The net NPA (NNPA) ratio also improved significantly from 0.96% in Dec 2023 to 0.41% in Dec 2024.

PNB Notifies RBI About ₹270 Crore Fraud

State-owned Punjab National Bank (PNB), one of India’s largest public sector banks, has reported a borrowal fraud of ₹270.57 crore to the Reserve Bank of India (RBI). The fraud pertains to the NPA account of M/s Gupta Power Infrastructure Limited at its Bhubaneshwar branch (BO: Bhubaneshwar, CO: Bhubaneshwar, ZO: Bhubaneshwar).

PNB made the disclosure via an exchange filing on February 18, 2025, confirming that it has already made full provisions for the fraud under RBI’s prudential norms.

PNB’s Asset Quality Shows Steady Improvement

While addressing the fraud case, PNB also shared positive financial indicators regarding its asset quality:

• Gross NPA (GNPA) Ratio: Improved from 6.24% (Dec 2023) to 4.09% (Dec 2024).
• Net NPA (NNPA) Ratio: Reduced from 0.96% (Dec 2023) to 0.41% (Dec 2024).

PNB’s efforts in strengthening its balance sheet reflect consistent improvements in asset quality, despite the reported fraud case.

PNB’s Bad Loan Recovery Plans

Earlier this month, PNB announced its goal of recovering ₹17,000 crore ($1.96 billion) in bad loans in the current financial year (FY 2024-25).

• One-third of these recoveries are expected to take place between January and March 2025.
• The bank successfully recovered ₹20,164 crore in bad loans during FY 2023-24.

PNB’s asset quality has steadily improved over the past two years, following a difficult phase caused by:

• The corporate bad loan crisis (2011-2019).
• The COVID-19 pandemic’s impact on lending.

PNB Q3 FY25 Financial Performance

PNB posted strong quarterly results for October-December 2024 (Q3 FY25):

• Net Profit: Increased by 102.8% to ₹4,508 crore from ₹2,223 crore in Q3 FY24.
• Return on Assets (RoA): Rose to 1.03% from 0.58% in the year-ago period.
• Return on Equity (RoE): Improved to 19.22%, up from 12.45% in Q3 FY24.

This remarkable growth signals PNB’s strong financial health, despite the recent fraud report.

Conclusion: What’s Next for PNB?

While PNB’s ₹270 crore fraud case raises concerns, the bank’s improving asset quality and strong financial performance demonstrate effective risk management and recovery strategies.

As PNB continues its focus on reducing bad loans and strengthening its financial position, the industry will closely watch how it navigates fraud-related challenges and NPA recoveries in 2025.