Viability Rating: Fitch places PNB in 'negative watch category'

New Delhi : Fraud case against Punjab National Bank negatively impacted Viability Rating of the financial body as Fitch placed it in the negative watch category.

According to the official release, PNB viability rating of 'bb' came under the Rating Watch Negative (RWN) due to ongoing loan default scam.

"Fitch would resolve the rating watch once more clarity emerges on the extent of control failures and the impact on PNB's financial position," the statement read.

However, the credit rating body clarified that the rating would not impact PNB's Support Rating Floor (BBB-) due to the bank's high systemic importance as the second-largest state-owned bank.

"We believe that the state's propensity to provide extraordinary support to PNB remains high, subject to the sovereign's ability, which is captured in India's sovereign rating of 'BBB-'," Fitch said.

However, Fitch noted that the scam caused a setback for the bank in its reputation and affected the capital market as well.

All other ratings of PNB have shown no effect as per current data.