Punjab National Banks South Mumbai branch. | PTI / Shashank Parade
Punjab National Bank's South Mumbai branch. | PTI
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New Delhi/Mumbai: India’s beleaguered state-run lender Punjab National Bank disclosed another incident of fraud amounting to Rs 38 billion ($555 million), roughly one year after it suffered through the country’s costliest banking scandal.

The new case relates to the non-performing assets of insolvent Indian firm Bhushan Power & Steel Ltd., PNB said in a filing on Saturday. It reported the fraud to the Reserve Bank of India and made provisions worth 19.3 billion rupees.

PNB said Bhushan misappropriated bank funds and manipulated account books to raise money from consortium lender banks. A vast majority of the fraud took place at PNB’s Chandigarh branch, and also involved offices in Hong Kong and Dubai. The bank said it expects a “good recovery” from the insolvency case, which is currently before the National Company Law Tribunal.


Also read: Andhra Bank, SBI, UBI among top PSU banks with over 70% NPA from industry in FY19


The announcement is a fresh blow to PNB, which uncovered India’s biggest-ever bank fraud last year. That nearly $2 billion scandal was allegedly perpetrated by jeweler-to-the-stars Nirav Modi, who was arrested by U.K. police at the request of Indian authorities and is embroiled in an extradition process. Modi denies wrongdoing.

The sheer size of the fraud at the bank, as well as the jeweler’s presence in a large delegation at a Davos photo opportunity alongside Prime Minister Narendra Modi, fueled accusations that the ruling party took a lax approach to the country’s globe-trotting industrialists. Modi’s party, which won an even bigger parliamentary majority in May, denied those claims.- Bloomberg


Also read: PNB’s long journey from being the first swadeshi bank to the Nirav Modi fraud


 

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5 Comments Share Your Views

5 COMMENTS

  1. The nationalization of banks, has lead to most corruption by officers and politician. Whichever sector government enters or any institution run by government in general are inefficient and full of corruption, nepotism. Even regulatory bodies either run by government or even monitored by SC are found to be inefficient. Justice delayed is worst form of justice denied, and all lawyers, officials of governments and judiciaries are responsible for that. British judiciaries doing the same in favor of criminals in their country, when crimes are committed in other countries in the name of rights of criminals rather than victims of plaintiff countries.
    These can be said of dictators or communist run countries too.
    Government should limit their role to law & order, defense and other regulatory function rather than getting in to any business in the name of serving citizens. Domain specialist should head most essential government sponsored or supported institution like ISRO where private co are not ready or developed to takeover.

  2. Banks chalana sarkar ka kaam hi nahin hai. Another 70,000 litres of ATF will go in as mid air refuelling, get converted into a contrail of pure vapour, like this 3,800 crores.

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