Moody's downgrades PNB's rating due to Rs 144 bn-Nirav Modi fraud

Moody's estimates that PNB will require external capital of about Rs 120-130 billion in fiscal 2019 to meet the minimum Basel III CET1 ratio

Global rating agency Moody’s has downgraded the rating for public sector lender Punjab National Bank to “Ba1’’ from “Baa3’’ due to the negative effect of fraudulent transactions (Nirav Modi sam) on capital position and asset quality.

At the same time, Moody's has downgraded the bank's baseline credit assessment (BCA) and Adjusted BCA to b1 from ba3.

The downgrade of the bank's BCA and ratings reflects the negative impact of the discovery of a number of fraudulent transactions on the bank's standalone profile, particularly its capital position, Moody’s said in a statement.

The rating downgrade also reflects the weak internal controls