On Saturday, the Punjab National Bank (PNB) revealed that it has reported a borrowing fraud of Rs3805 Crores to the Reserve Bank of India(RBI).The fraud was reported against Bhushan Power & Steel Ltd’s (BPSL) account. This comes a year after the bank had been defrauded of over $2 billion in a separate scam.
On the basis of the findings of forensic audit and the police filing a first information report(FIR), The fraud, “alleging diversion of funds from the banking system” was being reported to the RBI, 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 a provision of Rs.1,932 crore in Bhushan’s account, had already been made. The bank said its domestic exposure to BPSL stood at Rs 3,191.51 crore and overseas exposure of USD 49.71 million (approx Rs 345.74 crore) at Dubai branch and USD 38.51 million (approx. Rs.267.90 crore) at Hong Kong branch.
Bhushan Power and Steel is one of India’s most indebted companies. It was also among the first 12 companies referred by the RBI to a bankruptcy court for a debt resolution process under new insolvency law. However, no statement has been made yet by the company on the PNB statement.
PNB Reports Another Fraud
