Allahabad Bank stock drops 14.5 pc after reporting Rs 1,775 cr fraud

Allahabad Bank stock dropped 14.5 per cent on Monday after the company reported a fraud of Rs 1,775 crore by Bhushan Power and Steel to the Reserve Bank of India.

The scrip tanked 14.52 per cent to Rs 40.30 on the BSE.

At the NSE, the stock plunged 14.42 per cent to Rs 40.35.

Allahabad Bank is the second state-owned lender to have reported fraud by Bhushan Power and Steel Ltd (BPSL) to the RBI.

Earlier this month, Punjab National Bank reported a fraud worth Rs 3,805.15 crore by BPSL by misappropriating bank funds and manipulating its books of accounts.

Allahabad Bank in a regulatory filing on Saturday said that on the basis of forensic audit investigation findings and CBI filing FIR against the company and its directors, alleging diversion of funds from banking system by BPSL, a fraud of Rs 1,774.82 crore has been reported by the bank to the RBI.

Allahabad Bank further said it has been observed that the company has misappropriated bank funds, and manipulated books of accounts to raise funds from consortium lender banks.