The Wall Street Journal: India’s 2nd largest bank uncovers scam involving $1.77 billion in transactions

India’s second-largest state bank said it had uncovered an alleged scam involving some $1.77 billion in transactions at a Mumbai branch, sending shares plunging as investors waited to see whether its bottom line would be damaged.

“The bank has detected some fraudulent and unauthorized transactions (messages) in one of its branches in Mumbai,” company secretary Balbir Singh said in an exchange filing on Wednesday.

Shares of the Punjab National Bank 532461, -10.36%   dropped 10.3% on the news.

The filing provided few details, but it said several customers had benefited and that other local and international banks had been involved. It was unclear what form the alleged fraudulent transactions had taken.

“Other banks appear to have advanced money to these customers abroad,” the filing said.

An extended version of this report appears at WSJ.com.

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