Allahabad Bank defrauded of Rs 1,775 cr by Bhushan Power & Steel (Lead, Correcting Headline)

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Mumbai, July 13 (IANS) After Punjab National Bank, Allahabad Bank on Saturday said that it has been defrauded by Bhushan Power & Steel Ltd (BPSL) to the tune of Rs 1,774.82 crore.

The bank said in a regulatory filing that “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 state-run bank said 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 has come to light within a week of another public sector bank reporting that it has been cheated by Bhushan Power. Last week, Punjab Nation Bank reported another fraud worth Rs 3,805.15 crore by Bhushan Power & Steel Ltd to the RBI.

–IANS

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