Fraud-hit Punjab National Bank reported a ₹13,416.91 crore loss in the fourth quarter of 2017-18, compared with a ₹261.9 crore profit a year earlier.
A significant reason for the bank’s largeest-ever quarterly loss was the rise in provisions to ₹20,353.1 crore in the quarter ended March, compared with ₹5,753.51 crore a year earlier, according to the bank’s filing with the stock exchanges.
PNB’s gross non-performing assets grew to ₹86,620.05 crore in the quarter from ₹55,370.45 crore in the same period of the previous year, and ₹57,519.41 crore in the quarter ended December 2017. Hence, gross NPA ratio rose to 18.38% in the quarter ended March , from 12.53% a year earlier. Regarding the bank’s liabilities due to the Nirav Modi scam, the bank said: “The liabilities on account of LoUs/FLCs which became due up to March 31, 2018 amounting to ₹6,586.11 crore have been paid by the Bank on the undertaking of banks concerned that they will reimburse the amount to the bank if the court of competent jurisdiction or an investigation agency under Indian laws finds such LOCs/FLC, to have been issued pursuant to the knowledge of the alleged fraud or collusion in the alleged fraud by any existing or past officials/employees of the concerned banks.” Provisions made for non-performing assets increased to ₹16,202.82 crore from ₹2,996.42 crore over the same period.
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Betting on systems
“Several steps are in the pipeline or have already been initiated by the bank to reduce dependence on human intervention,” PNB said in a release. “The bank plans to rely on artificial intelligence for reconciliation of accounts and incorporate analytics for improving audit systems. Further, the internal audit process is also being augmented to give higher weight to the offsite monitoring mechanism and reduce dependence on physical inspection and audit to identify risks,” the release added.