PNB says detects 38 billion rupee fraud
Sun Jul 07 2019
Lucy Harlow (2406 articles)

PNB says detects 38 billion rupee fraud

 The Punjab National Bank (PNB) on Saturday said it had reported a borrowing fraud of 38.05 billion Indian rupees ($ 556 million) in Bhushan Power & Steel Ltd’s account to the Reserve Bank of India (RBI).

The fraud, “alleging diversion of funds from the banking system” was being reported to the RBI on the basis of the findings of forensic audit and the federal police filing a first information report, the PNB said in a statement to stock exchanges.

“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks,” PNB said, adding that it had already made provisions of 19.32 billion rupees in Bhushan’s account.

PNB has been defrauded of over $ 2 billion in a separate scam that came to light last year.

Bhushan Power and Steel, one of India’s most indebted companies, was among the first 12 companies referred by the RBI India to a bankruptcy court for a debt resolution process under India’s new insolvency law.

The company could not be reached for comment on the PNB statement.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe