PNB MD says Nirav Modi scam is bygone; bank to turn profitable next year

PNB is expected to turn profitable this fiscal and is poised for growth, its MD Sunil Mehta said asserting that the Rs 14,000 crore Nirav Modi scam is a bygone.

The proposed fund infusion would support growth initiatives of the bank. (Image: PTI)

The Punjab National Bank (PNB) is expected to turn profitable this fiscal and is poised for growth, its Managing Director Sunil Mehta said asserting that the Rs 14,000 crore Nirav Modi scam is a bygone. Mehta said he hopes that PNB will be back into the black during 2018-19 due to various efforts taken by the bank after the fraud came to light in January this year. "The bank has demonstrated its capability to absorb such a shock and hopefully it would be back into the black during this financial year itself," he told PTI in an interview after donating Rs 5 crore for the flood relief and rehabilitation to Kerala Chief Minister Pinarayi Vijayan Monday. The bank is slowly getting on to the growth path, he said adding that credit growth is picking up and has surpassed industry average. PNB reported a loss of Rs 940 crore for the June quarter of 2018-19 financial year. It clocked a profit of Rs 343.40 crore in the same quarter of 2017-18. To give fillip to expansion plan, the bank's board has sought Rs 5,431 crore capital support from the government through issuance of preferential shares. The proposed fund infusion would support growth initiatives of the bank. The previous fund infusion of Rs 2,816 crore earlier this year was for meeting regulatory ratios, he said. So in all, PNB is set to get Rs 8,247 crore fund support out of Rs 65,000 crore earmarked for the entire public sector banking system for the current fiscal. After clearance from extra general meeting (EGM) on October 30 and other regulatory approvals, the fund infusion would be made in the bank. Nirav Modi and his uncle Mehul Choksi duped PNB of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs), in connivance with certain bank officials. A Mumbai branch of PNB had fraudulently issued LoUs for the group of companies belonging to Modi since March 2011. Talking about PNB's initiative for flood-ravaged Kerala, Mehta said: "PNB has always shown commitment for the national cause. The major havoc flood has played in Kerala needs sympathetic consideration from all in the country and PNB cannot be behind." As part of the initiative, PNB's employees and retirees have collected Rs 5 crore for flood relief and rehabilitation.