New Delhi: State-owned Punjab National Bank (PNB) has reported a major loan fraud of ₹2,434 crore to the Reserve Bank of India (RBI), involving the erstwhile promoters of SREI Equipment Finance Ltd (SEFL) and SREI Infrastructure Finance Ltd (SIFL). The disclosure was made through a regulatory filing on Friday.
Fraud Reported to RBI
According to PNB, the bank has classified the accounts as borrowing fraud and reported the matter to the RBI. The fraud amount pertains to ₹1,240.94 crore related to SEFL and ₹1,193.06 crore linked to SIFL, attributed to their former promoters.
The bank clarified that it has already made 100 percent provisioning against the entire outstanding exposure, ensuring that there is no additional financial impact on its balance sheet.
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Background of SREI Group Resolution
Both SEFL and SIFL, which together had financial debt of around ₹32,700 crore, underwent resolution proceedings under the Insolvency and Bankruptcy Code (IBC). In December 2023, the two companies were acquired by National Asset Reconstruction Company Ltd (NARCL) as part of the resolution process.
The Reserve Bank of India had earlier, in October 2021, superseded the boards of SIFL and its wholly owned subsidiary SEFL, citing governance concerns and alleged mismanagement. The companies were previously controlled by the Kolkata-based Kanoria family, with Hemant Kanoria being the key figure associated with SIFL.
Following the RBI’s action, insolvency proceedings were initiated, leading to a change in ownership and management.
PNB’s Financial Performance
Despite the fraud reporting, PNB continues to show improvement in its financial performance. The bank reported a 14 percent year-on-year increase in standalone net profit to ₹4,904 crore for the September quarter of FY26, compared to ₹4,303 crore in the same period last year.
Operating profit for the July–September quarter stood at ₹7,227 crore, while for the April–September period (H1 FY26) it rose to ₹14,308 crore, registering year-on-year growth of 5.46 percent and 6.51 percent, respectively.
About Punjab National Bank
Punjab National Bank (PNB) is a leading public sector bank in India, with a legacy spanning over a century. As one of the country’s largest state-owned lenders, PNB provides a wide range of banking and financial services to individuals, businesses and government entities across India and overseas markets.
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