Another scam worth Rs 38.05 rocks PNB
The Punjab National Bank (PNB) on Saturday said it recently reported the Reserve Bank of India (RBI) a borrowing fraud of Rs 38.05 billion ($556 million) in one of the nation’s most indebted companies’ accounts. This led to a slumping of PNB shares by 7 per cent on Monday.
Bhushan Power and Steel Limited (BPSL) is one of the 12 accounts identified by the RBI for insolvency proceedings. According to PNB, the company misappropriated bank funds and manipulated books to raise funds from consortium lenders.
In a regulatory filing, the PNB said, “On the basis of the 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 3805.15 crore is being reported by the bank to the RBI. In the accounts of the BPSL Company, the bank has already made provisions amounting to Rs 1,932.47 crore as per prescribed prudential norms.”
The PMB has been duped of over Rs 13,500 crore in a separate scam that came to light in 2018. The scam involved diamantaries Nirav Modi and his nephew Mehul Choksi.