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Ratings agency Fitch has placed Punjab National Bank's (PNB) Viability Rating of 'bb' on Rating Watch Negative (RWN), following the Rs 11,300 crore fraud reported in the bank's Brady House branch in Mumbai. The decision means that the country's second largest lender may see a rating downgrade.“The RWN (rating watch negative) reflects the possibility of a downgrade of PNB’s Viability Rating following the detection of a large fraud in one of the bank’s branches amounting to $1.8 billion. While the exact financial impact from this event is still being ascertained, it has raised questions on both internal and external risk controls as well as the quality of management supervision considering that the fraud went undetected for several years,” Fitch said in a note. Viability ratings (VRs) of Fitch are designed to be internationally comparable and represent the rating agency's view as to the creditworthiness of an issuer. A poor viability rating refers to bank's inability to maintain ongoing operations and to avoid failure. On a scale of 'aaa' to 'f', PNB's current rating of 'bb' suggests mediocre performance by the bank. More specifically, 'bb' rating refers to moderate degree of fundamental financial strength. However, the rating also means that certain degree of vulnerability exists in the bank's state of affairs.Fitch said that it will resolve Rating Watch once further clarity emerges on extent of control failures and the impact on PNB's financial position. Celebrity jeweller Nirav Modi, the alleged kingpin of the largest banking scam in the country's history, has said PNB's overzealousness shut the doors on his ability to clear the dues in a letter to the Punjab National Bank's management. Mr Modi also said the dues were much less than what the bank has claimed, and that his relatives booked in the cases filed by the central agencies had nothing to do with the operations of the firms under their scanner.