The collapse in the banking shares triggered by Punjab National Bank scam intensified on Monday after the CBI filed an FIR in the Vikram Kothari-run Rotomac Pens loan default case. The agency said exposure of different banks to the scam stood at nearly Rs 37,000 crore. The back-to-back scams have led to erosion of market cap of banks a whopping Rs 70,000 crore in a mere five days.
After the shares of PSU banks — including PNB, Bank of Baroda and SBI — staged a mild recovery from the day’s low on Friday, Monday saw a free fall in the banking indices, which crashed by nearly 250 points at one of time.
Many of the banking stocks hit their 52-week lows and plunged anything between five to 10 per cent as the Rotomac loan default case spooked the banking sector. The scam was earlier estimated at around Rs 800 crore.
Shares of Union Bank of India dropped 7.19 per cent; Bank of Maharashtra - 6.79 per cent, Syndicate Bank - 6.45 per cent, Allahabad Bank - 6.30 per cent and Bank of Baroda - 5.48 per cent on BSE. Among others, UCO Bank slipped 4.58 per cent, Dena Bank - 4.43 per cent and Oriental Bank of Commerce 1.71 per cent. Among those which hit their 52-week lows during the day, falling by up to 11 per cent included Bank of Maharashtra, Union Bank of India, Syndicate Bank, UCO Bank, Allahabad Bank, Oriental Bank of Commerce and Dena Bank.
PNB shares have crashed by 28%, eroding nearly Rs 10,976 crore of its market cap since the scam came to light on February 14. State Bank of India’s market value has come down by Rs 18,000 crore while Bank of Baroda’s market cap has declined by Rs 5,634 crore.
The panic in the PSU banking sector also impacted private banks. Axis Bank, Yes Bank and ICICI Bank have lost around Rs 5,630 crore, Rs 4,820 crore and Rs 4,006 crore of their market value respectively.