Synopsis: The company’s shares have fallen around 3 percent following its report to the RBI about the borrowing fraud committed by the erstwhile promoters, with fraud totalling Rs 2,343 crore.
The shares of the company which is one of the leading banking and financial services providers owned by the Government of India, are in focus after reporting financial fraud leading to increase in NPA.
With a market capitalization of Rs. 1,37,743 crore, Punjab National Bank’s shares on Monday opened to mark a day low of Rs. 116.25, down by 3.4 percent from its previous day’s closing price of Rs 120.35 per share. The share has given a return of 244 percent over the last 5 years.
Punjab National Bank, on December 26, 2025 informed RBI about the borrowing fraud done by the erstwhile promoters. Both of the companies involved in the fraud were successfully resolved under the Corporate Insolvency Resolution Process (CIRP) by the Hon’ble NCLT.
The Loan fraud was committed by SREI Equipment Finance Ltd (SEFL) for an amount of Rs 1240.94 crore and SREI Infrastructure Finance Ltd (SIFL) for an amount of Rs 1193.06 crore, against which PNB has already made 100 percent provision. This is done by SREI’s former promoters, and now PNB’s action will allow bodies like CBI and ED to step forward to investigate why the fraud took place.
This fraud might negatively impact the company’s gross NPA, which improved in Q2 FY26 to 3.45 percent, down 103 bps YoY, and its provision coverage ratio of 96.91 percent in Q2, which was up by 24 bps YoY. In turn may also move to increase its Slippage ratio, which stood at 0.71 percent in Q2 FY26.
In October 2021, the RBI took control of SIFL and its wholly-owned subsidiary SEFL, citing governance concerns and mismanagement. This made SREI the second non-banking financial company (NBFC) to be taken to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC).
The Corporate Insolvency Resolution Process (CIRP) was initiated by the NCLT. The two Srei companies combined had a total financial debt of approximately ₹32,700 crore owed to various lenders, including Punjab National Bank (PNB), State Bank of India, and others. This is not the first fraud reported by PNB. The bank was earlier at the center of attention due to the Nirav Modi and Mehul Choksi Scam, one of the largest banking frauds worth over Rs 13,000 crore, orchestrated by jeweller Nirav Modi and his uncle Mehul Choksi, along with their companies and complicit bank officials.The fraud ran from 2011 to 2017 before being exposed in January 20
Financial highlights, revenue from operations grew by 7 percent to Rs 32,513 crore, corresponding to the same quarter in the last financial year. EBDIT grew 11 percent to Rs 24,214 crore in Q2 FY26 from Rs 21,855 crore in Q2 FY25. Accompanied by Net profit growth of 9 percent YoY to Rs 5,121 crore and EPS growth of 9 percent YoY to Rs 4.46 per share.
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