Canara Bank Shares Tumble After CBI Charges Ex-Chairman In Loan Fraud Case

Mumbai: Canara Bank shares tumbled more than 5 per cent on Tuesday morning after Central Bureau of Investigation (CBI) filed charges against a former chairman of the state-run bank and others over allegations that the officials helped a company defraud the bank of about $10.5 million taken in loans over four years ago.

The case is the latest in a string of bank frauds reported to authorities in the aftermath of a sprawling $2 billion fraud that was unearthed weeks ago at Punjab National Bank (PNB).

At 10:05, Canara Bank shares were trading 3.5 per cent lower at Rs 255 on the BSE, whose benchmark index Sensex was up 60 points at 32,983. Canara Bank shares fell as much as 5 per cent earlier on Tuesday.

The CBI also said it had arrested seven people - including two former managers of the country's largest lender, State Bank of India (SBI), a former manager of Canara Bank and directors of a Kolkata-based private company - in a separate "bank fraud" case of about Rs. 150 crore ($2.3 million). (Read more)

As of last September, state banks held about 87 per cent of the Indian banking system's 9.46 lakh crore (about $147 billion) of soured loans that are non-performing, restructured or rolled over.

In the alleged PNB fraud, the biggest in India's banking history, the bank has accused two jewellery groups, one controlled by diamond tycoon Nirav Modi and the other by his uncle, Mehul Choksi, of colluding with rogue bank employees to secure credit overseas.