Shares of Indian banks dropped as worries intensified about fallout from a $1.77 billion fraud at Punjab National Bank. PNB was down as much as 5.9 per cent after the CBI sealed the company’s Mumbai branch. The police also detained two employees of the bank suspected of steering fraudulent loans. Indian banks could take a hit of more than $3 billion from loans and corporate guarantees to diamond companies, tax department said in note seen by Reuters. The NSE PSU bank index was down as much as 2.4 per cent to lowest since October 24.
State-run UCO Bank slumped as much as 12.3 per cent to its lowest since April 2009. The company said on Sunday it had $411.82 million in exposure to fraudulent transactions carried out at PNB.