Punjab National Bank terms Rs 3689 crore loan to DHFL as a fraud

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Punjab National Bank has called a loan worth Rs 3,688.58 crore that it had extended to Dewan Housing Finance Corporation DHFL a ‘fraud”. In a regulatory filing after market hours, the country’s third largest public sector bank, PNB, said the fraud in the non-performing asset account of DHFL “at Large Corporate Branch” in Mumbai was reported to the Reserve Bank of India (RBI).

Once seen as a leading housing finance NBFC in India DHFL took on total debts of almost Rs 1 lakh crore and then failed to honour dues to its creditors. CBI and Enforcement Directorate have arrested the promoter of DHFL, Kapil Wadhawan and Yes Bank promoter Rana Kapoor in another loan kickback case.

Punjab National Bank said it had already made provisions of Rs 1,246.58 crore pertaining to the incident. Banking regulations require the provision on an account affected by fraud to be 100 per cent, made over four quarters.

Bank Frauds: One too many for PNB

This is the fourth time that Punjab has been defrauded. Here are the big fraud cases reported by PNB previously.

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1. Nirav Modi transaction fraud
In early 2018 PNB reported that jeweller Nirav Modi had defrauded the bank of Rs 11,400 cr through fraudulent transactions claiming buyers credit. Nirav Modi was arrested in UK and remains in prison awaiting extradition to India.

Bhushan power and steel

2. Bhushan Power & Steel fraud
In July 2019 PNB reported that Bhushan Power and Steel had defrauded the bank of Rs 3805.15 crore. PNB said the company misappropriated bank funds and manipulated books to raise funds from consortium lenders.

Carnation Auto,

3.Carnation Auto fraud
In October 2019 PNB filed a complaint alleging that Jagdish Khattar, founder of Carnation Auto India Pvt., a vehicle repair and servicing company, cheated the bank of Rs 110cr. The CBI is investigating the case

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