First lender, Punjab National Bank (PNB) has reported a fraud amounting to Rs. 3,805.15 crore by Bhushan Power and Steel, last week.
Again, Allahabad Bank, second lender has reported a fraud of Rs. 1,774.82 crore to Reserve Bank of India (RBI). The bank has already made provisions to ₹900.20 crore against the funds provided by the bank to Bhushan Power and Steel.
Allahabad bank has reported that the company has manipulated the books of accounts and misappropriated bank funds for the purpose of raising funds from consortium of banks. This came into noticed on the basis of findings of the forensic audit investigation and the FIR against the company and its directors by CBI.
According to CBI, Amount involving approx. Rs. 2,348 Crore is diverted by the company in ore than 200 shell companies through its directors and staff from the loan accounts of PNB (IFB New Delhi & IFB Chandigarh), Oriental Bank of Commerce (Kolkata), IDBI Bank (Kolkata) and UCO Bank (IFB Kolkata) into without any purpose.
After two major frauds, It is expected by CBI that there could be more banks and several other lenders that would report fraud by Bhushan Power and Steel.
Bhushan Power and Steel had also defaulted the loans of Rs, 47,700 Crore in 2017.
At present, the case is at NCLT which is in advance stage and the Bank expects good recovery in the account.
Market Impact of Fraud
Shares of Allahabad Bank on Monday dropped as much as 14.42 per cent to Rs. 40.35 after the bank reported the fraud by Bhusan Power and Steel on Saturday.
Trading volume in Allahabad Bank shares spiked as 8.48 lakh shares on the BSE compared with an average of 3.08 lakh shares traded daily in the past two weeks.