Punjab & Sind Bank shares drop over 6 pc after lender flags Rs 238-cr fraud

Shares of Punjab & Sind Bank Thursday fell over 6 percent after the lender reported over Rs 238-crore fraud by Bhushan Power and Steel (BPSL). The scrip sank 6.20 percent to Rs 24.20 on the BSE.

On the NSE, shares cracked 6.39 percent to Rs 24.15. The state-owned bank Wednesday reported over Rs 238-crore fraud by Bhushan Power and Steel, a third such instance after similar disclosures made by PNB and Allahabad Bank recently.

"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 the banking system, a fraud of Rs 238.30 crore is being reported by the bank to Reserve Bank of India. "In the accounts of the company (BPSL), the bank has already made provisions amounting to Rs 189.35 crore, as per prudential norms," Punjab & Sind Bank said in a regulatory filing. It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium of lender banks, it said.