J&K Bank tumbles on buzz of loan fraud

The scrip fell 3.31% to Rs 36.55 on reports that the Anti-Corruption Bureau (ACB) investigation finds irregularities in board approvals.

Meanwhile, the S&P BSE Sensex was up 286.77 points or 0.77% to 37,637.10.

On the BSE, 52,000 shares were traded in the counter so far compared with average daily volumes of 3.58 lakh shares in the past two weeks. The stock hit a high of Rs 37.2 and a low of Rs 36.3 so far during the day.

The stock hit a 52-week high of Rs 65.95 on 10 Apr 2019. The stock hit a 52-week low of Rs 32.25 on 06 Aug 2019.

As per reports, the case has been registered in a bank-loan fraud worth Rs 350 crore, and searches have been conducted at the Bengaluru office of the bank.

The ACB has reportedly said that the management at the corporate headquarters/zonal office, Bengaluru, and officers/officials of J&K Bank, Infantry Road Branch, Bengaluru, had given loans worth crores of rupees to Rawther Spices by passing all norms and procedures.

The ACB investigation and verification procedures have reportedly found that Rawther Spices was established in 1985 and was dealing in import and export of spices and coffee. In 2002, the company was sanctioned a loan of Rs 2 crore against collateral security of three properties valued at Rs 10 crore by J&K Bank. Since 2012, the limits of different types of loans had been increased by the bank significantly and the total loan amount has risen up to Rs 308.13 crore in 2015 against increased mortgage/security value to Rs 147.43 crore.

Jammu & Kashmir Bank (J&K Bank)'s net profit declined 58.4% to Rs 21.87 crore on 18.9% rise in total income to Rs 2256.25 crore in Q1 June 2019 over Q1 June 2018.

J&K Bank functions as a universal bank in Jammu & Kashmir and as a specialized bank in the rest of the country.

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