PNB reports ₹2,434 crore fraud involving two Srei Group companies:Bank says full recovery made, assuring no financial impact

After the Nirav Modi and Mehul Choksi cases, Punjab National Bank (PNB) has reported another loan fraud involving two finance companies of the Srei Group. The bank said that former promoters of Srei Equipment Finance Limited (SEFL) and Srei Infrastructure Finance Limited (SIFL) committed a combined fraud of ₹2,434 crore. PNB has informed banking regulator Reserve Bank of India (RBI) about the matter. In a regulatory filing on Friday, the bank stated that the former promoters of SEFL were involved in a fraud of ₹1,240.94 crore, while SIFL accounted for ₹1,193.06 crore. PNB Says Entire Loan Amount Recovered PNB clarified that the disclosure will not impact its financial position, as the bank has already made 100% provisioning for the entire outstanding amount, effectively completing full recovery. Combined Debt of ₹32,700 Crore; Action Taken Under IBC The two Srei Group companies together had outstanding debt of ₹32,700 crore. Due to failure in repayment, insolvency proceedings were initiated against them under the Insolvency and Bankruptcy Code (IBC). In December 2023, both companies were acquired by National Asset Reconstruction Company Limited (NARCL) as the new promoter. In October 2021, the Reserve Bank of India (RBI) removed the boards of Srei Infrastructure Finance Limited (SIFL) and its subsidiary Srei Equipment Finance Limited (SEFL) over allegations of mismanagement. Prior to this, both companies were controlled by the Kanodiya family of Kolkata. Following the board’s removal, RBI initiated IBC proceedings against the firms. Founded in 1989 as an asset-financing NBFC, the Srei Group was led by Hemant Kanoria, who was the key face of SIFL. PNB Reports ₹4,904 Crore Profit in September Quarter Punjab National Bank reported a 14% year-on-year rise in its standalone net profit for the September quarter of FY26, which increased to ₹4,904 crore, compared with ₹4,303 crore in the same period last year. The bank’s operating profit stood at ₹7,227 crore during the July–September quarter, while it reached ₹14,308 crore in the April–September half-year period. On an annual basis, operating profit recorded growth of 5.46% for the quarter and 6.51% for the half-year. ₹11,000-Crore Fraud Case of 2011 Earlier, in 2011, Punjab National Bank was hit by one of the biggest frauds in Indian banking history, involving diamond traders Nirav Modi and Mehul Choksi, who are currently abroad. Efforts are underway to bring them back to India. Nirav Modi, his uncle Mehul Choksi—owner of Gitanjali Gems—fraudulently obtained Letters of Undertaking (LoUs) from PNB’s Brady House branch in Mumbai. Using these LoUs, credit was taken from overseas banks without providing any collateral. With the alleged involvement of certain bank officials, these transactions were not recorded in PNB’s core banking system. In January 2018, PNB filed a complaint with the CBI, naming Nirav Modi, his wife Ami Modi, brother Nishal Modi, and Mehul Choksi as accused. Several of their firms, including Diamonds R US, Solar Export, Stellar Diamond, and Gitanjali Gems, were also named in the case. Mehul Choksi Case Timeline 2017 2018 (January) 2018 (February) 2018 (February) 2018 (May) 2018 (April) 2021 (May) 2021 (June) 2023 (March) 2023 (September) 2024 (September) 2025 (April) ​