Bank stocks tank on PNB fraud woes

Shares of Union Bank of India today ended 1.50 per cent lower after the lender said it has an exposure of Rs 1,900 crore to the PNB fraud case.
During the day, the stock had slumped to its 52-week low on BSE.
"We wish to inform you that the bank through our foreign branches has been taking exposure with Punjab National Bank (PNB) as counterparty under various Letters of Undertakings (LoU) issued through authenticated SWIFT message," Union Bank of India said in a late night filing to stock exchanges.
State-owned Punjab National Bank on February 14 said it has detected a Rs 11,400 crore scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.

While PNB did not name the other lenders, besides Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.
Shares of Allahabad Bank settled at Rs 54.75, down 0.36 per cent on BSE. During the day the stock had plunged to its 52-week low level of Rs 53.10.

Axis Bank ended the day at Rs 537.75, down 1.10 per cent.
As the Enforcement Directorate conducted multiple searches at establishments linked to Modi, seizing diamonds, jewellery and gold worth Rs 5,100 crore and sealing six properties, the finance ministry said recovery would be made and nobody would be spared.

PNB has already suspended 10 officers and referred the matter to CBI for investigation.