The cost of being under-insured is likely to hit Punjab National BankBSE -2.10 % (PNBBSE -2.10 %) hard. Currently, the public sector bank has only bought a basic banker’s indemnity policy, which covers employee fraud, to the extent of Rs 2 crore — or 0.70% of the total fraud of around Rs 11,300 crore — according to highly-placed sources.
With the RBI likely to direct PNB to pay the entire Rs 11,300 crore, it will fall on its books and not other banks such as Axis BankBSE -1.10 %, ..