Punjab National Bank (PNB) has reported a borrowal fraud amounting to ₹2,434 crore to the Reserve Bank of India, linking the irregularities to former promoters of SREI Infrastructure Finance.
According to banking disclosures, the fraud pertains to loans extended to SREI entities, where the account has been classified as fraudulent following an internal examination. The decision to tag the account as fraud was taken after identifying significant deviations from sanctioned terms, suspected fund diversion, and misrepresentation of financial information.
PNB, which is part of a consortium of lenders to SREI, has informed the RBI in line with regulatory norms that mandate banks to report large-value frauds once detected. Such reporting enables further regulatory scrutiny and allows investigating agencies to initiate appropriate action.
The SREI Group had been facing severe financial stress for several years, leading to loan defaults and eventual insolvency proceedings. The company was later taken over by new management through a resolution process, while investigations into past financial practices of the former promoters have continued.
Banking sector experts note that classification of accounts as fraud has serious implications, including potential criminal proceedings, restrictions on future borrowing, and recovery actions under applicable laws. The disclosure also highlights the continued focus of banks on tightening credit monitoring and strengthening governance mechanisms.
The development underscores ongoing challenges in resolving legacy stressed assets within the banking system, even as lenders step up efforts to improve transparency, accountability, and risk management.
