Equity MF investments: Ripple effect on PSBs due to free fall in PNB shares

The nearly 10 per cent fall in the shares of Punjab National Bank (PNB), hit by a $1.8 billion fraud, has impacted more than 100 mutual fund equity schemes. The mutual fund industry owns 232 million shares of PNB, worth Rs 40 billion, as on 31 January, 2018. Several schemes of LIC Mutual Fund have heavy allocation to India's second largest public lender, some as high as 7.5 per cent.

The free fall in PNB’s shares on Wednesday also had a ripple effect on other public sector banks. Collectively, the top 6 PSU banks have attracted more than Rs