PNB to honour all inter-bank LoUs, FLCs

PNB to honour all inter-bank LoUs, FLCs
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New Delhi: State-run lender Punjab National Bank (PNB) will honour all inter-bank Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) issued by it which mature on or before March 31, 2018.

The decision was taken by the Board of PNB in a meeting held on Wednesday.

“The PNB board’s decision will lead to settling of LoUs worth Rs 6,500 cr with 7 banks in relation to the recent fraud that was reported by the bank,” the lender said in a statement.

“The bank will also honour all subsequent maturing LoUs and FLCs as and when they are due.”

According to the lender, it has a strong balance sheet to meet any contingent liabilities arising out of the recent fraud.

“This measure will ensure that India’s banking system at large has the least possible disruption owing to the unfortunate fraud and banking operations will continue to function smoothly,” the statement said.

IANS