One more Banking Fraud: PNB reports Rs 3,805-cr fraud by Bhushan Steel

Another fraud, this time amounting to Rs 3,805.15 crore has been reported at the state-run Punjab National Bank (PNB), this time by the now-insolvent Bhushan Power and Steel Ltd.

In February 2018, the Rs 13,500-crore scam involving diamantaires Nirav Modi and Mehul Choksi had come to light at the PNB. The bank said BPSL had misappropriated funds and manipulated books of accounts to raise funds from consortium lender banks.

“On the basis of forensic audit investigation findings and the CBI filing a suo motu FIR against the company and its directors alleging diversion of funds from banking system, a fraud of Rs 3,805.15 core is being reported by bank to the RBI,” said the statement. The PNB noted that it has already made provisions amounting to Rs 1,932.47 crore in its company accounts, as per the prescribed prudential norms.

The Rs 3,805.15-crore in the NPA account of BPSL, included domestic exposure of Rs 3,191.51 crore at the bank’s large Corporate branch at Chandigarh, overseas exposure of $49.71 million at its Dubai branch and $38.51 million at the Hong Kong branch, the PNB said. It is one of the first 12 accounts identified by the RBI for insolvency proceedings. “At present, the case is in advanced stage at the NCLT and the bank expects good recovery in the account,” it said.


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