Mumbai– Shares of the Punjab National Bank (PNB) on Thursday continued to drop for a second consecutive day — closing almost 12 per cent lower — after a $1.8 billion fraud was detected in one of its branches in Mumbai.

Its scrips dipped by 11.97 per cent to close at Rs 128.35 per share, lower by Rs 17.45 from the previous close at Rs 145.80.

Stocks of jewellery companies like Gitanjali Gems and PC Jewellers too declined after authorities blamed billionaire diamond trader Nirav Modi for the fraud.

Stocks of Gitanjali Gems, the luxury jewellery brand promoted by Modi’s maternal uncle Mehul Choksi, plunged almost 20 per cent. Scrips of PC Jewellers fell 5.31 per cent on the BSE.

On Wednesday, PNB — the second largest public sector bank in India — informed the stock exchanges through a regulatory filing that it has detected a $1.8 billion fraud in one of its branches in Mumbai.

In the filing, PNB put the quantum of fradulent transactions at $1,771.69 million (around Rs 11,515 crore), which is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).

The bank’s shares had plunged drastically on Wednesday following the regulatory filing to close lower by 9.81 per cent at the BSE.

The fraud, which includes money-laundering among others, concerns the Firestar Diamonds group in which the Central Bureau of Investigation last week booked Modi, his wife Ami, brother Nishal and uncle Choksi.

On Thursday, the Enforcement Directorate launched a nationwide raid on the offices, showrooms and workshops of Nirav Modi.

Sunil Mehta, MD and CEO of PNB said the company “will not spare anyone” involved in the wrongdoing.

“We are known for clean banking. The fraud started in 2011. We have brought it under the notice of regulatory and law enforcement agencies as soon as we came to know about it. We will not spare anyone involved in the fraudulent practice,” Mehta told reporters on Thursday. (IANS)