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India's PNB says detects $ 38bn. Rupee fraud

People walk past Punjab National Bank's Brady House Department in Mumbai, India, June 14, 2018. REUTERS / Francis Mascarenhas

MUMBAI (Reuters) ̵

1; India's state-run Punjab National Bank (PNB) on Saturday said it had reported a loan fraud of 38.05 billion Indian Rupees ($ 556 million) in Bhushan Power & Steel Ltd's account to the National Bank.

The "redistribution of funds from the banking system" scam was reported to the Reserve Bank of India (RBI) on the basis of the results of forensic audit and the federal police who submitted a first information report, PNB said in a stock exchange statement.

"It has been observed that the company has abused bank funds, manipulated accounting books to raise funds from consortium lender banks," PNB said, adding that it had already made provisions of 19.32 billion rupees in Bhushan's account.

PNB has been deceived by over $ 2 billion in a separate scam reported last year.

Bhushan Power and Steel, one of India's most indebted companies, was among the first 12 companies that RBI India referred to a bankruptcy court for a debt process process under India's new insolvency law.

The company could not reach comment on the PNB declaration.

Reporting of Sankalp Phartiyal; Editing by Stephen Powell

Our Standards: Thomson Reuters Trust Principles.

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