India’s PNB detects ₹38 billion ($556bn) in fraud

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India’s PNB detects ₹38 billion ($556bn) in fraud

On Saturday, the 6th of June 2019, India’s state-controlled Punjab National Bank issued a public statement saying that the lender had reported a borrowing fraud of about $556 million (38.05 billion rupees) to Reserve Bank of India (RBI) in the account of Bhusan Power & Steel Ltd.

Besides, Punjab National Bank had said in its Saturday’s (July 6th) statement to stock exchanges that following conducting a forensic audit and filing a federal police report, the fraud termed as “alleging diversion of funds from the banking system,” was reported to the country’s central bank, RBI (Reserve Bank of India).

Adding that the Indian lender had already handed over ₹19.32 billion to Bhusan’ account, Punjab National Bank said in its statement, “It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks”.

As a matter of fact, Punjab National Bank had been a subject to a separate scam last year, which had defrauded about $2 billion from PNB. Nonetheless, the Bhusan Power & Steel Ltd., headquartered in New Delhi, had been one of the twelve most indebted companies in India, which were recommended earlier by RBI for bankruptcy court resolutions. While being asked for comments over the subject-matter, Bhusan Power & Steel Ltd. did not respond immediately.