Punjab & Sind Bank declares SREI group firms dues as fraud

Punjab & Sind Bank has declared outstanding dues of SREI companies as fraud, it said in a notice to the stock exchanges.

In its filing, the bank said that the NPA accounts, SREI Infrastructure Finance (SIFL) with outstanding dues of Rs 510.16 crore and SREI Equipment Finance Limited (SEFL) with outstanding dues of Rs 724.18 crore have been declared as fraud and reported to the RBI as per regulatory requirement.

With this, the bank became the first to classify SIFL and SEFL as fraud accounts, according to sources.

In its filing, the bank also said that the accounts have been fully provided for as per prescribed prudential norms.

Sources close to SREI promoters said that it was unfortunate that a public sector bank had taken such a step even when the KPMG report – on which the decision is seemingly based – is still sub-judice. “Necessary legal steps will be initiated in this regard,” they said.