PNB, in a regulatory filing late on Monday, disclosed fraudulent transactions of over Rs 1,300 crore, in addition to the Rs 11,400 crore reported earlier. The alleged fraud, by far the biggest ever detected by an Indian bank, is centred around companies linked to billionaire jeweller Nirav Modi and his uncle Mehul Choksi, owner of Gitanjali Gems Ltd.
Besides banks, some selling was witnessed in metal and realty shares. On the 50-scrip Nifty index, Axis Bank, SBI and Sun Pharma were among the top losers - closing the session with losses of up to 2.5 per cent.
Investor sentiment was also tepid ahead of domestic economic data including October-December quarter gross domestic product (GDP) and fiscal deficit. A Reuters poll forecast GDP expansion at 6.9 per cent, the fastest in 2017.
"There is caution ahead of the economic data, but it is expected to be positive," said Vinod Nair, head of research at Geojit Financial Services.
Ambuja Cement and ACC shares closed down around 4 per cent and 2 per cent respectively, after the cement companies late on Monday said they had put on hold plans for a proposed merger.
(With agency inputs)