Dwarka Das declared wilful defaulter in 2014, case reported to CBI: OBC

Oriental Bank of Commerce (OBC) today said Dwarka Das International was declared a wilful defaulter in June 2014 and it has already reported the fraud by the city-based jeweller to CBI as well as the Reserve Bank as per the procedures.
The state-owned bank further said that the alleged fraud of Rs 389.85 crore will not impact its profitability as the lender has made full provisions for the defaulted amount in its books.
In a filing to stock exchanges, OBC said the account turned non-performing asset (NPA) or bad loan on March 31, 2014 and the bank had declared the company a wilful defaulter on June 30, 2014.

"Further, as per extant procedures, the bank reported these accounts as fraud to CBI and RBI. The case has now been registered as per procedures.
"Total exposure in these account have been fully provided for and there will be no additional impact on the profitability on the bank," it added.
The CBI has registered a case against Dwarka Das Seth International, diamond jewellery exporter, for an alleged bank loan fraud of Rs 389.85 crore towards OBC.

The probe agency has booked the company as well as Sabhya Seth, Reeta Seth, Krishna Kumar Singh and Ravi Singh -- all directors of the firm -- and another company named Dwarka Das Seth SEZ Incorporation.

The company has availed various credit facilities from OBC from 2007-12, which swelled to Rs 389 crore during the period.
The company was using Letters of Credit (LoCs) to pay off other creditors against the purchase of gold and precious stones, and transferring gold as well as funds outside the country using fictitious transactions, the bank complaint, now part of the CBI FIR, alleged.
The company was also engaging in business transactions with non-existent entities, it said.
The OBC stock dipped 10.26 per cent to Rs 94.90 on BSE.