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Indian bank hit by $1.8bn fraud case

From BBC - February 14, 2018

India's second largest state-run bank has uncovered a $1.8bn (1.3bn) scam linked to a single Mumbai branch.

The fraud amounts to nearly a third of Punjab National Bank's (PNB) market value, and 50 times its profits for the last quarter of 2017.

The bank said the fraudulent transactions appeared to benefit a handful of customers.

But there are concerns the fraud could affect other banks, and hurt confidence in India's banking sector.

Shares hit

India's Enforcement Directorate, a government agency that fights financial crime, will probe the possibility of money laundering in the case.

In a regulatory filing, PNB said the transactions were "for the benefit of a select few account holders with their apparent connivance".

It signalled that the fraud could affect other banks, which "appear to have advanced money to these customers abroad".

Shares in the bank have fallen by more than 10%.

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