State-owned Punjab & Sind Bank Wednesday reported over Rs 238 crore fraud by Bhushan Power and Steel, a third such instance after similar disclosures made by PNB and Allahabad Bank recently.
"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, a fraud of Rs 238.30 crore is being reported by bank to RBI.
"In the accounts of the company (BPSL), bank has already made provisions amounting to Rs 189.35 crore, as per prudential norms," Punjab & Sind Bank (PSB) said in a regulatory filing.
It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium of lender banks, it said.
"At present, the case is at NCLT which is in advance stage and the bank expects good recovery in the account," it added further.
Last week, Allahabad Bank had reported to the RBI about a fraud of Rs 1,774.82 crore by BSPL, alleging diversion of funds from banking system by the company.
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"The bank has already made provisions amounting to Rs 900.20 crore against the exposure of the bank in BPSL," Allahabad Bank had said on Saturday.
Earlier, Punjab National Bank (PNB) had also reported to the RBI about a fraud worth Rs 3,805.15 crore by Bhushan Power and Steel.
Around 85 per cent of PNB's Rs 4,399 crore exposure to the company had been siphoned off.
It is expected that more banks would report fraud committed by Bhushan Power and Steel as the CBI complaint registered in April named several other lenders.
According to the CBI, BPSL diverted around Rs 2,348 crore through its directors and staff from the loan accounts of PNB (IFB New Delhi & IFB Chandigarh), Oriental Bank of Commerce (Kolkata), IDBI Bank (Kolkata) and UCO Bank (IFB Kolkata) into the accounts of more than 200 shell companies without any obvious purpose.
The agency said that the company in doing so had misused the funds and the FIR named chairman Sanjay Singhal, vice-chairman Aarti Singhal, along with other directors as suspects.
"It was further alleged that the said company availed various loan facilities from 33 banks/financial institutions during the year 2007 to 2014 to the tune of about Rs 47,204 crore and defaulted on repayments. Subsequently, lead bank PNB declared the account as NPA followed by other banks and financial institutions," the CBI had stated.