New Delhi: Allahabad Bank has become the latest entrant in the list of being ‘defrauded’ to the tunes of thousands of crores when it reported to the RBI that Bhushan Power and Steel Limited (BPSL) has defaulted on funds around Rs 1,774.82 crore.
The bank said in a regulatory filing that “on the basis of forensic audit investigation findings and CBI filing FIR, on suo moto basis, against the Company and its Directors, alleging diversion of funds from banking system by the Bank’s borrower, namely Bhushan Power & Steel Ltd (BPSL), a fraud of Rs 1,774.82 crore has been reported by the Bank to the Reserve Bank of India”.
The state-run bank said that it has already made provisions amounting to Rs 900.20 crore against the exposure in BPSL.
“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks. At present, the case is at the NCLT which is in advance stage and the Bank expects good recovery in the account,” the bank added.
The Allahabad Bank fraud has come to light within a week of another public sector bank reporting that it has been cheated by Bhushan Power. Last week, Punjab Nation Bank reported another fraud worth Rs 3,805.15 crore by Bhushan Power & Steel Ltd to the RBI.
Reportedly, Bhushan Power and Steel was one of India’s most indebted companies and was one of the first referred by the RBI to a bankruptcy court to resolve a debt under the new insolvency law.
Meanwhile, State-run lenders currently under the RBI’s Prompt Corrective Action (PCA) framework on account of bad loans and heavily loss-making banks may not be allowed to buy the pooled retail assets of non-banking finance companies (NBFCs) under the scheme announced in the Budget, official sources said, which may leave space for only SBI, Canara Bank, Bank of India, Bank of Baroda to make such purchases.
With IANS inputs