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Fraud-hit PNB may not get additional capital from government, says report

Fraud-hit PNB may not get additional capital from government, says report
The government will not infuse additional capital over what has already been accounted for in the fraud-hit Punjab National Bank (PNB), Mint reported.
"We have told PNB that they should focus on selling their non-core assets and recoveries from Insolvency and Bankruptcy Code (IBC). We will not provide them any additional capital to tide over the provisioning from the fraud. They will get only what has been budgeted,” said the senior official cited earlier, who did not wish to be identified.
PNB posted a wider-than-expected loss of Rs 13,417 crore as non-performing assets rose to 18.38% compared to 12.11% in the previous quarter.
The fraud was uncovered in the March quarter. The fraud amount, which is amounting to $2 billion, was siphoned from the bank through issuance of Letters of Undertaking (LoUs) to fugitive diamond businessman Nirav Modi.
PNB bank officials, Nirav Modi and his accomplices were involved in the money laundering case.
The firm officials would approach the bank for LoUs, which are bank guarantees allowing customers to raise money from any other Indian bank’s foreign branch in the form of short-term credit.
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