Punjab National Bank (PNB) that has been at the centre of the Rs 114 billion fraud perpetrated by Nirav Modi had a fund and non-fund based exposure (as a percentage of loan book) at 0.6% and 0.1% respectively in FY17, suggests a recent Edelweiss Securities report on the sector co-authored by Kunal Shah and Prakhar Agarwal.
Bank of India (BoI), State Bank of India (SBI), Canara Bank and IDBI Bank are among those that highest fund-based exposure to the sector as a percentage of total loan book among the public sector (PSU) during this period.
Among their private sector counterparts, IndusInd Bank with 6.1% fund-based exposure to the sector as a percentage of loan book tops the list.
Fund-based lending is where the lending bank commits the physical outflow of funds. The various forms in which fund based lending may be made by banks include loans, overdrafts, cash credit etc. Non-fund based facilities, on the other hand, are credit facilities given by the banks where actual bank funds are not involved.
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