In a major disclosure on Friday, December 26, 2025, the state-owned Punjab National Bank (PNB) informed the Reserve Bank of India (RBI) and stock exchanges of a borrowing-related fraud exceeding ₹2,400 crore. The fraud is linked to the former promoters of two SREI Group entities, marking a significant development in the resolution of one of India’s largest non-banking financial company (NBFC) collapses.
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The Core of the Fraud: SREI Group Exposure
The fraudulent transactions involve two specific accounts that have been under the scanner since 2021. According to PNB’s filing, the breakdown is as follows:
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SREI Equipment Finance Ltd (SEFL): Fraud of ₹1,240.94 crore reported.
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SREI Infrastructure Finance Ltd (SIFL): Fraud of ₹1,193.06 crore reported.
The bank clarified that these entities have already been through the Corporate Insolvency Resolution Process (CIRP) and were resolved under the National Company Law Tribunal (NCLT) in 2023 via the National Asset Reconstruction Co (NARCL).
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Key Figures Table: PNB Fraud & Financial Health (Q3 2025)
| Metric | Details / Value |
| Total Fraud Amount Reported | ₹2,434 Crore |
| Provision Made | 100% (Full Amount) |
| Gross NPA Ratio (Sep 2025) | 3.45% (Improved from 4.48%) |
| Provision Coverage Ratio (PCR) | 96.91% (Up 24 bps YoY) |
| PNB Share Price (Dec 26, 2025) | ₹120.35 (Settled 0.5% lower) |
| Year-to-Date (YTD) Stock Gain | 17% |
Financial Impact: No New Hit to Bottom Line
Investors can breathe a sigh of relief as PNB confirmed it has already made 100% provisions for the entire outstanding amount in these accounts.
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Legacy Issues: These frauds date back to the 2021 RBI crackdown on SREI Group, which involved total defaults of nearly ₹28,000 crore.
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Improving Asset Quality: Despite this large fraud report, PNB’s overall asset quality has been on an upswing. Its Net NPA (NNPA) ratio fell to a record low of 0.36% in the September quarter of 2025.
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Market Reaction: PNB shares closed slightly lower at ₹120.35 on Friday, reflecting general market caution rather than a sharp reaction to the fraud, as the loss was already accounted for in previous quarters.
What This Means for the Banking Sector
This report is part of a broader “clean-up” where PSU banks are officially categorizing stressed legacy accounts as “Fraud” following forensic audits. It underscores the RBI’s stringent stance on governance and the misuse of funds by former promoters of large NBFCs.
Conclusion
While the ₹2,434 crore figure is substantial, PNB’s proactive provisioning and the successful resolution of SREI assets mean that the bank’s current capital adequacy remains strong at 17.19%. The report serves as a formal regulatory closure to a long-standing legacy issue.
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Disclaimer: This report is based on stock exchange filings and market data as of December 26, 2025. Stock market investments are subject to market risks. Please consult a financial advisor before making any investment decisions.
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