Oriental Bank of Commerce falls 9% on talks of Rs 3.9 billion scam

The stock slipped 9% to Rs 96.20, also its fresh 52-week low on the BSE.

Oriental Bank of Commerce (OBC) has slipped 9% to Rs 96.20, also its fresh 52-week low on the BSE, after the media report suggested that the state-owned lender has alleged the firm, Dwarka Das Seth International, for fraudulent loan scam, involving Rs 3.90 billion.

The Central Bureau of Investigation (CBI) has registered a case against a Delhi-based jeweller on a complaint from government-owned OBC, the Business Standard reported.

The jewellery firm cheated the bank with the help of some of its officials, using Letters of Credit (LCs) — a banking instrument similar to those used by a group of companies belonging to Nirav Modi and Mehul Choksi to allegedly defraud Punjab National Bank of Rs 114 billion, added report. CLICK HERE TO READ FULL REPORT

An LC is an obligation accepted by a bank to make a payment if specified criteria are met.

At 09:29 am; the stock was trading 8.8% lower at Rs 96.50 on the BSE as compared to 0.48% rise in the S&P BSE Sensex. A combined 7.21 million shares changed hands on the counter on the BSE and NSE so far.