UCO Bank sinks 11% on disclosing exposure to PNB fraud case

UCO Bank shares plunged as much as 11 percent in morning Monday after the bank disclosed its exposure to the PNB fraud case.

The stock touched a 52-week low of Rs 25.20 on the BSE.

The state-run lender has USD 411.82 million in exposure to fraudulent transactions carried out at Punjab National Bank (PNB).

India’s second-largest state-run lender PNB on last Wednesday had detected fraudulent transactions worth USD 1.8 billion (Rs 11,400 crore) in its Mumbai branch that had benefited “a few select account holders”, and that it had reported the matter to law enforcement agencies.

UCO Bank in its filing on Saturday said its Hong Kong branch granted loans against letters of credit issued by PNB and was “fully confident” of receiving payment from PNB.

The alleged fraud at PNB benefited billionaire jeweller, Nirav Modi and jewellery retailer Gitanjali Gems.

The Central Bureau of Investigation (CBI) detained two employees of Punjab National Bank and an employee Nirav Modi’s company.

At 09:50 hours IST, the stock price was quoting at Rs 26.25, down Rs 2.15, or 7.57 percent amid high volumes on the BSE.