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Punjab & Sind Bank flags Rs 2.4-billion fraud by Bhushan Power

Mumbai: Punjab & Sind Bank reported the Reserve Bank of India (RBI) about a fraud of Rs 2.38 billion by Bhushan Power and Steel Ltd.

"On the basis of forensic audit investigation findings and Central Bureau of Investigation filing a first information report, on suo moto basis, against the company and its directors, alleging diversion of funds from banking system, a fraud of Rs 2.38 bn is being reported by the bank to RBI," the bank said.

It said the company has misappropriated bank funds, and manipulated its books of accounts to raise funds from a consortium of lenders.

The state-owned banks has already made provisions of Rs 1.89 bn against the account, the bank said, adding that because the case is in an advanced stage of insolvency proceedings in the National Company Law Tribunal (NCLT), it expects 'good recovery' in the account.

So far, Punjab National Bank (PNB) and Allahabad Bank have reported a fraud of Rs 38.05 bn and Rs 17.74 bn, respectively, by Bhushan Power and Steel to the RBI. It ended 0.2% lower at Rs 25.80 on the NSE Wednesday.