Shares in Punjab National Bank fell as much as 10 per cen to Rs 73.80, after the bank said it had detected fraud with regards to Bhushan Steel Account.
"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. 3805.15 core is being reported by Bank to RBI. In the accounts of the company (BPSL), Bank has already made provisions amounting to Rs.1932.47 crore, as per prescribed prudential norms. 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 said in a statement.
Bhushan Power and Steel, was among the first 12 companies referred by the RBI India to a bankruptcy court for a debt resolution process under India's new insolvency law.