Nifty PSU Bank index hits 19-month low, down 7% in two days

Shares of public sector undertaking (PSU) banks continued to be under pressure with the Nifty PSU Bank index hitting 19-month low as investigation deepened in the Punjab National Bank (PNB) fraud case. At 11:39 am; Nifty PSU Bank index, the largest loser among sectoral indices, was down 4% at 2,818, as compared to 0.70% decline in the Nifty 50 index. The Nifty PSU Bank index hit an intra-day low 2,813, its lowest level since August 12, 2016, when the index touched 2,773 in intra-day deal. Canara Bank, Andhra Bank, Allahabad Bank, Bank of India, Oriental Bank of Commerce, Bank of Baroda and Union Bank of India from the Nifty PSU Bank index touched their respective fresh 52-week lows on the NSE today. PNB, India's second-biggest lender on February 14 reported about the Rs 114 billion scam allegedly done by diamond jeweller Nirav Modi and his uncle Mehul Choksi, chairman and managing director of Gitanjali Gems. Including today's loss, Nifty PSU Bank has fallen nearly 19 per cent since February 14, when the scam came to light.

On comparison, the benchmark Nifty 50 index was down 3.5% during the period. In past two trading days, the index has fallen 7% after the media report suggested that ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar and her Axis Bank counterpart Shikha Sharma were on Tuesday summoned by the Serious Fraud Investigation Office (SFIO) in connection with the PNB fraud involving absconding diamantaire Nirav Modi and his uncle Mehul Choksi. Sources said the anti-fraud agency asked senior executives from 31 banks with business dealings with firms promoted by Modi and Choksi to be present at its office in financial capital Mumbai. Meanwhile, the Central Bureau of Investigation (CBI) on Tuesday detained Gitanjali Group of Companies Vice-President Vipul Chitalia as part of its probe into the multi-billion fraud. CLICK HERE TO READ FULL REPORT