Loans, meanwhile, are often doled out to politically important projects or voting regions before being given to financially worthy ones. Punjab National Bank said on Wednesday that it had “detected some fraudulent and unauthorized transactions” at one of its Mumbai branches. Fears that India’s wider banking sector may be exposed to Punjab National Bank’s troubles left investors panicked, driving shares in several other lenders to close lower on Wednesday, too. The central bank, the Reserve Bank of India, did not immediately respond to emailed requests for comment. But government officials played down the extent of Punjab National Bank’s woes and the potential for ripple effects on the sector.

Source: New York Times February 14, 2018 15:45 UTC