PNB scam: Fitch places bank's rating under watch with negative implications

The move could lead to a possible downgrade for Punjab National Bank, India's second-largest public-sector bank

Following the revelation of the Rs 114-billion fraud at Punjab National Bank, global rating agency Fitch has placed the lender's viability under rating watch with negative (RWN) implications. This could lead to a possible downgrade.

Fitch will resolve the rating watch after more clarity emerges on the extent of control failures and the impact on PNB's financial position.

The RWN reflects the possibility of a downgrade of PNB's viability rating, following the detection of a large fraud in one of the bank's branches.

At this stage, it does not view this event to have an impact on PNB's support rating