India-based Punjab National Bank (PNB) has identified deceitful transactions worth about $1.7bn at a single Mumbai branch in the state of Maharashtra.
The bank announced that the fraud benefited few select account holders in a regulatory filing.
Nirav Modi, billionaire jewellery designer, and others made fraudulent transactions worth over $44m.
Last month, PNB first reported to the Central Bureau of Investigation (CBI) that it detected the fraudulent transactions and alerted other lenders about the alleged fraud.
Letters of undertaking (LoUs), which is an assurance given by one bank to another to meet a liability on behalf of a customer, have been issued by two junior officials illegally that resulted in fraudulent transactions.
Other state-run banks such as Union Bank and Allahabad Bank have exposure to PNB fraud case. Union Bank of India has an exposure of about $300m to the case.
PNB, which is a multinational banking and financial services firm, commenced its operations in 1895. It is claimed to be the first bank managed by the Indians with Indian capital.
With over 80 million customers, the bank has 6,937 branches and 10681ATMs across 764 cities.
PNB also provides banking services in the UK, Hong Kong, Kowloon, Dubai, and Kabul. It also manages representative offices in Almaty of Kazakhstan, Shanghai of China, Oslo of Norway and Sydney of Australia.
The bank has a 20% stake in Nepal’s Everest Bank, which manages 50 branches.
PNB offers personal, corporate, international and capital services to its customers. Its corporate services include corporate loans, cash management services and doorstep banking services.
Image: Punjab National Bank has detected fraudulent transactions at its Mumbai branch. Photo: courtesy of gnepphoto / FreeDigitalPhotos.net.