New Delhi, India | December 27, 2025
Punjab National Bank (PNB), one of India’s oldest and most trusted public sector banks, is once again in the spotlight—this time due to the detection of a ₹2,434 crore fraud, which the bank has formally reported to the Reserve Bank of India (RBI). The case is linked to two Kolkata-based companies of the Shrey Group, raising fresh concerns over corporate loan monitoring in the banking sector.
What Is the Case About?
According to disclosures made by PNB to stock exchanges, the fraud involves two separate loan accounts—Shrey Equipment Finance Limited and Shrey Infrastructure Finance Limited. The bank found evidence of regulatory violations and diversion of funds, categorizing the case as a “borrowing fraud.”
A breakdown of the figures shows:
₹1,241 crore linked to Shrey Equipment Finance
₹1,193 crore linked to Shrey Infrastructure Finance
Together, the total fraud amount stands at ₹2,434 crore.
How Did the Fraud Occur?
In banking terms, a borrowing fraud typically occurs when loan funds sanctioned for specific projects are diverted for unrelated purposes or routed through other entities. Investigations suggest similar fund misuse patterns in the Shrey Group accounts.
Founded in 1989, the Shrey Group specialized in financing construction equipment. Over time, mounting debt pressures led to large-scale defaults. The situation deteriorated to such an extent that in October 2021, the RBI dissolved the company’s board due to governance failures and defaults totaling nearly ₹28,000 crore. Although a resolution plan was later approved through the National Asset Reconstruction Company, investigations remain ongoing.
Should Depositors Be Worried?
PNB has moved quickly to reassure customers and investors. The bank clarified that it has already made 100 percent provisioning against the affected loans. In simple terms, the potential loss has already been accounted for in its books.
PNB’s Provision Coverage Ratio (PCR) stands at nearly 97 percent, indicating strong financial resilience. The bank emphasized that the fraud will not impact depositors or daily banking operations.
A History of High-Profile Cases
This is not the first time PNB’s name has surfaced in a major fraud. In 2018, the bank was at the center of the Nirav Modi–Mehul Choksi scam, which involved misuse of Letters of Undertaking (LoUs). However, officials note that the current case is different in nature, involving corporate lending irregularities rather than trade finance, and was detected and reported in line with regulatory norms.
Market Impact
Ahead of the disclosure, PNB shares witnessed a mild dip. Despite short-term volatility, the bank’s stock has delivered a strong return of nearly 144 percent over the past three years, reflecting improved asset quality and investor confidence.
