Allahabad Bank, on Saturday, alleged diversion of funds from banking system by Bhushan Power & Steel Ltd (BPSL), reporting a fraud of Rs 1,774.82 crore.

Allahabad Bank stock down 11 after reporting Rs 177482 crore Bhushan Power fraud
Money Fraud Monday, July 15, 2019 - 10:36
Written by  IANS

In reaction to the Rs 1,774.82 crore Bhushan Power & Steel Ltd (BPSL) fraud that Allahabad Bank reported in the weekend, its scrips fell by over 11 per cent during the early trade on Monday.

At 9.22 a.m., the state-run Allahabad Bank was trading 11.24 per cent lower at Rs 41.85 on the BSE.

After the Punjab National Bank, Allahabad Bank on Saturday informed the stock exchanges that it has been defrauded by Bhushan Power & Steel Ltd (BPSL) to the tune of Rs 1,774.82 crore.

"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 company said.

The Allahabad Bank, however, added 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 came to light within a week of another public sector bank, PNB, reporting that it has been cheated by Bhushan Power worth Rs 3,805.15 crore by BPSL

Last week Punjab National Bank reported to the Reserve Bank of India that the Rs 3,800 crore includes Rs 3,191 crore borrowed from Punjab National Bankā€™s Indian branch while amounts of $49.71 million and $38.51 million have been drawn from the overseas branches of the bank in Dubai and Hong Kong respectively.

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