Professional Documents
Culture Documents
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V It is fundamentally U It fundamentally
related and associated
VOLATILITY
means a lack of
UNCERTAINTY
with the speed of
“
advancement in the predictability in
business, market and issues and events.
so on.
AMBIGUITY
consider, their variety, how to interpret
and the connections and something.
relationships between
them. 2
As opposed to
3
What is irregular about the fraud?
How PNB was defrauded of ₹ 11,400 Crores? Jewellery Sector under stress?
How was the LoU misused? Why did PNB give an LoU without any collateral?
Taxpayers taxed again?? How did the fraud come into the light? How much is the loss?
What other banks were affected?
Who is Nirav Modi? Bail – In Provision weakened?
Who assumes the Liability?
Risk Management
PNB Ratings downgraded!!
position vacant?
Impacts on Stock Markets?
LIC – The biggest loser!!
Confidence on investor hit!
What action has PNB taken?
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This study uses secondary data.
Newspaper journals, RBI circulars related to the
scam were reviewed. RESEARCH
Bank stock market data were taken from Sensex.
METHODOLOGY
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5W2H OF THE PNB SCAM
WHAT? WHO? WHEN?
• What happened? • Who are the culprits involved? • When did the fraud come into
• What is the fraud about? • Who reported the fraud? the light?
• What is irregular about this • Who assumes the liability? • When did the scam start and
fraud? • Who are the stakeholders stop?
• What action has PNB taken? involved?
• What other banks were
affected? Where? Why?
• What is the extent of the fraud?
• What are the authorities doing? • Where did the scam happen? • Why did PNB give an LoU
• What all other companies were guarantee without any
involved in the scam? collateral?
• Why is it a problem?
How? How much?
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What is the Ideal Situation?
India Overseas
CBS
Bank A SWIFT Bank B
Issuer Overseas Branch
Receiving Bank
Limit/Collateral
/Credit Margin
LoC/LoU
Credit
Payment
Indian Company X Foreign Company Y
Goods/Services
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What actually happened?
India Overseas
CBS
Bank A SWIFT Bank B
PNB Overseas Branch
Collateral/Cash
Payment
Indian Company X Foreign Company Y
Goods/Services
Diamond R US, Solar Exports &
Stellar Diamonds
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FRAUD IN NUMBERS…!!
₹ 1,14,00,00,00,000
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Repercussions of the Scam…
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1. Impact on Stock Market.
2. PC Jewelers 19.5%
4. Thangamayil Jewelry 2%
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1. Impact on Stock Market.
Table 3: Loss of LIC on account of PNB Scam
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2. The confidence of the investor.
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PNB Ratings by Credit Ratings Agencies
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Recommendations:
INDEPENDENT
01 DUE 03 SPECIALIZED 05
DILIGENCE CADRE
FIX THE AUTONOMY RISK
BANKING 02 TO THE 04 MANAGEMENT
SECTOR BANKING OFFICER
SECTOR
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Thank you
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