Indian Bank Reports Saravana Stores NPA Account As Fraud Due To Diversion Of Funds

The Indian Bank announced on Wednesday that the Saravana Stores NPA account, which has an outstanding balance of Rs 231 crore, has been deemed fraudulent.

The nature of the fraud is the diversion of funds, according to the lender, who added that Saravana's outstanding balance was Rs 230.74 crore.

As of December 31, 2020, the bank had a provision of Rs 115.32 crore against this, it said.

"Having regard to the Bank's policy on determination and disclosures of material events/information, we have to inform you that Non-Performing Account as M/s Saravana Stores (Gold Palace) has been declared as fraud and reported to RBI as per regulatory requirement," the company told the stock exchanges.

Saravana Stores is a group of jewellery showrooms located in Tamil Nadu. The bank posted a 108.1 percent increase in net profit to Rs 514.29 crore in Q3 FY21 over Q3 FY20, on a 75.6 percent increase in total income to Rs 11,421.34 crore.

Saravana Stores Elite Pvt Ltd, a subsidiary of the Saravana Stores group, opened its jewellery showroom in Chennai in 2003.

Shares of the Bank were seen trading at Rs 113.50, down 0.74 % at 1.25 pm IST. It touched an intra-day low of Rs 112.75 and high of Rs 115.80 during trade.