Punjab National Bank (PNB) on Tuesday reported a net loss of Rs 13,417 crore in Q4FY18, the largest quarterly loss in Indian banking history, as the withdrawal of restructuring schemes for stressed assets and the Nirav Modi fraud took their toll, reports fe Bureau in Mumbai, against a profit of Rs 262 crore last year. Provisions quadrupled on a y-o-y to Rs 20,353 crore. PNB said liabilities from letters of understanding and foreign letters of credit involving Modi and Mehul Choksi-related accounts that became due up to March 31 came to Rs 6,586 crore. Punjab National Bank (PNB), the country\u2019s second-largest public sector lender, on Tuesday reported a net loss of Rs 13,417 crore in the March quarter of FY18 \u2014 the largest quarterly loss in the history of Indian banking \u2014 as the withdrawal of restructuring schemes for stressed assets and the Nirav Modi fraud took their toll. In the corresponding quarter a year ago, the bank had posted a net profit of Rs 262 crore. Provisions quadrupled on a year-on-year (y-o-y) basis to Rs 20,353 crore. At the operating level as well, PNB reported a loss of Rs 447 crore, as against an operating profit of Rs 6,232 reported in the same period last year. Its net interest income \u2014 difference between interest earned and interest expended \u2014 stood at Rs 3,063 crore, down 17% y-o-y, and its domestic net interest margin \u2014 a key measure of profitability \u2014 stood at 2.51%, down from 2.58% in Q3. PNB said the liabilities on account of letters of understanding (LOUs) and foreign letters of credit (FLCs) involving the Nirav Modi and Mehul Choksi-related accounts which became due upto March 31 amounted to Rs 6,586 crore. These dues have been repaid by PNB on an undertaking by the concerned banks that they will reimburse the amount to PNB if the court of competent jurisdiction or an investigation agency under Indian laws finds those loan facilities to have been issued pursuant to the knowledge of the alleged fraud or collusion in the alleged fraud by any existing or past employees of the concerned banks. \u201cFurther, as a prudent measure, the bank has created liability in the books in respect of LOUs\/FLCs which are becoming due after 31.03.18 amounting to Rs 6959.79 crore,\u201d PNB said in the notes to the statement of accounts. The bank has made provisions of 50%, or Rs 7,178 crore against the fraud accounts and the remaining provision of another 50% will be spread out over the first three quarters of FY19. While PNB did not state the amount of slippages that resulted from the revoking of asset restructuring schemes, it said the number of accounts that slipped as a result of the Reserve Bank of India\u2019s (RBI) February 12 circular was 28 and provisions worth Rs 3,120 crore were made against these accounts. For providing against mark-to-market (MTM) losses on securities, PNB charged depreciation of Rs 741 crore for Q3 and Q4 of FY18 and plans to spread provisions worth Rs 1,088 crore over the coming quarters. With a capital adequacy ratio of 9.2%, as opposed to the regulatory minimum of 10.25%, and a return on asset (RoA) of -6.72%, the likelihood of PNB coming under the RBI\u2019s prompt corrective action (PCA) framework is now high. Asset quality at PNB worsened in the March quarter, with its gross non-performing assets (NPAs) as a percentage of total advances rising 627 basis points (bps) sequentially to 18.38%. Its net NPAs stood at 11.24%, up 369 bps sequentially. PNB\u2019s cash recoveries and upgradation in the March quarter stood at Rs 4,443 crore and Rs 2,9811,174 crore respectively. PNB's global net advances stood at Rs 4.02 lakh crore at the end of the March quarter, up 6.8% y-o-y, and its total domestic deposits stood at Rs 6 lakh crore, up 6.2% y-o-y. Its share of current account and savings account (CASA) deposits stood at Rs 2.23 lakh crore or 43.85% of its total domestic deposits.