LIC Will Not Pare Its Stake In Fraud-Hit PNB
The Life Insurance Corporation of India will not pare its stake in the fraud-hit state-owned lender Punjab National Bank.
“I stand by PNB because it is a 133-year old bank with its own strengths, so we have full trust,” said VK Sharma, chairman of LIC at a press conference in Mumbai. There are no plans of reducing our stake in the near future, Sharma added.
On Feb. 14, PNB disclosed that its staff had issued fraudulent ‘Letters of Undertaking’ based on which more than Rs 11,000 crore had been loaned out. The stock fell 22.3 percent in the three trading sessions since then.
India’s largest insurer has gradually increased its shareholding in PNB over the last seven years. It now owns nearly 14 percent stake compared with the 8 percent it held in 2011.