State-owned Punjab National Bank (PNB) has reported a loan fraud of over ₹2,400 crore to the Reserve Bank of India (RBI) in connection with accounts linked to the erstwhile promoters of Srei Group entities, the lender disclosed in a stock exchange filing on Friday.
The reported fraud comprises ₹1,241 crore related to SREI Equipment Finance and ₹1,193 crore linked to SREI Infrastructure Finance. PNB said it has fully provided for the entire outstanding exposure in both accounts, limiting any incremental impact on its balance sheet.
SREI Infrastructure Finance, which entered the construction equipment financing space in 1989, underwent a change in management following insolvency proceedings. Its board was reconstituted after the National Company Law Tribunal (NCLT) approved the resolution plan submitted by the National Asset Reconstruction Company Ltd (NARCL) in August 2023. The resolution marked a key step in the clean-up of stressed assets associated with the Srei Group.
The disclosure comes alongside a steady improvement in PNB’s operating performance. The bank reported a 14% year-on-year rise in standalone net profit to ₹4,904 crore for the July–September quarter of FY26, compared with ₹4,303 crore in the corresponding quarter last year. Operating profit stood at ₹7,227 crore in Q2FY26 and ₹14,308 crore for the first half of FY26, reflecting year-on-year growth of 5.46% and 6.51%, respectively.
Asset quality also improved during the period. PNB’s gross non-performing asset (NPA) ratio declined to 3.45% as of September 2025, from 4.48% a year earlier, while the net NPA ratio eased to 0.36% from 0.46%.
On the liability side, savings deposits rose 4.2% year-on-year to ₹5.09 lakh crore, while current account deposits increased 9% to ₹74,215 crore, indicating stable deposit accretion.
Separately, government-backed bad bank NARCL has stepped up recoveries, with resolutions more than doubling to ₹4,192 crore by October 2025, or nearly 14% of total assets acquired, reflecting faster progress in stressed asset resolution.
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