PNB reports over Rs. 3,800-cr fraud by Bhushan Power

Punjab National Bank has recently stated that it has detected a fraud of more than Rs 3,800 crore by Bhushan Power & Steel Ltd (BPSL) and has reported it to the RBI.PNB said Bhushan Power & Steel Ltd misappropriated bank funds and manipulated its books of accounts in order to raise funds from banks.

“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 3,805.15 crore is being reported by bank to RBI,” PNB 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 lender banks. At present, the case is at NCLT which is in advance stage and the Bank expects good recovery in the account,” PNB added.

PNB further stated the bank has already made provisions amounting to Rs 1,932.47 crore, as per prescribed prudential norms, for the BPSL account.

PNB said its domestic exposure to Bhushan Power & Steel Ltd (BPSL) stood at Rs 3,191.51 crore and overseas exposure of USD 49.71 million (approx Rs 345.74 crore) at Dubai branch and USD 38.51 million (approx. Rs.267.90 crore) at Hong Kong branch.