State-run Punjab National Bank (PNB) said on Wednesday it had detected some "fraudulent and unauthorised" transactions worth about $1.77 billion at one of its branches in Mumbai.

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The bank said in a regulatory filing the transactions were "for the benefit of a few select account holders with their apparent connivance" and that "based on these transactions other banks appear to have advanced money to these customers abroad."

PNB, the country`s second-biggest state-run lender and fourth-biggest overall by assets, did not name the people involved but said it had reported the deals to law enforcement agencies and would evaluate later whether it faces any liability arising out of the transactions.

"In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions," PNB said, without giving further details.

PNB shares were trading 4.1 percent lower by 0420 GMT, having fallen as much as 5.7 percent in early trading. The main Mumbai market index was little changed.

PNB is already dealing with other allegations of fraudulent transactions. Last week, Indian federal agents said they had launched an investigation into billionaire jeweller Nirav Modi, one of the country`s richest men, over accusations that he and others defrauded PNB of $44 million.

It was not immediately known if the latest disclosure on fraudulent transactions was related to or separate from the previous incident.

Four top PNB executives contacted by Reuters did not immediately respond requests seeking comment beyond the stock exchange filing.