Dena Bank, OBC shares fall amid concerns over Rs 436-cr scam

Shares of Dena Bank and Oriental Bank of Commerce plunged up to 5 per cent amid concerns related to a suspected scam.
Dena Bank' scrip tumbled 5.06 per cent to Rs 60.10, while shares of Oriental Bank of Commerce fell by 3.63 per cent to Rs 264 on the BSE.
The government has initiated a forensic audit at the state-run Oriental Bank of Commerce and Dena Bank after unearthing of a suspected scam, wherein the lenders allegedly misappropriated funds worth Rs 436 crore from their fixed deposit customers.
The lenders are alleged to have indulged in siphoning-off the money (Rs 180 crore by OBC and Rs 256 crore by Dena Bank) received as fixed deposits.

Meanwhile, in a clarification to the BSE Dena Bank said today, Malabar Hill Branch of the bank received bulk term deposits from various entities/government organisations between January 30, 2014 and May 5, 2014.
Subsequently, term deposits amounting to Rs 256.69 crore were pledged to the bank by the same signatories to obtain overdraft facilities of Rs 223.25 crore (present outstanding 217.17 crore).

The funds were surreptitiously transferred out of the bank by creating fake overdraft facility, resulting in a fraud on the bank and the concerned entities/Govt organisations. The bank has lodged complaint in this regard with CBI.
The bank has made a provision of Rs 54.29 crore during the quarter ended June 30, 2014 and the balance to be provided equally in subsequent three quarters of FY 2014-15.

The bank has suspended the erring branch manager and transferred the staff of the concerned branch, it said.