After PNB, Allahabad Bank reports Rs 1,775 crore fraud by Bhushan Power and Steel Ltd

PTI, Jul 14, 2019, 11:59 AM IST

New Delhi: After Punjab National Bank (PNB), another state-owned lender Allahabad Bank on Saturday reported a fraud of over Rs 1,774 crore by Bhushan Power and Steel Ltd. (BPSL) to the Reserve Bank of India (RBI).

In a regulatory filing, the bank said on the basis of forensic audit investigation findings and CBI filing FIR against the company and its directors, alleging diversion of funds from the banking system by BPSL, a fraud of Rs 1,774.82 crore has been reported by the bank to the RBI.

Last week, PNB reported a fraud worth Rs 3,805.15 crore by the bankrupt steel company by misappropriating bank funds and manipulating its books of accounts.

Around 85% of PNB’s Rs 4,399 crore exposure to the company had been siphoned off.

Allahabad Bank further said it had already made provisions amounting to Rs 900.20 crore against exposure of the bank in BPSL.

At present, the case is in the National Company Law Tribunal (NCLT), which is at an advance stage and the bank expects ‘good’ recovery in the account.

It is expected that more banks may report fraud committed by BPSL as the CBI complaint registered in April names several other lenders.