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Allahabad Bank tanks after reporting Bhushan Power fraud

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Allahabad Bank slumped 9.76% to Rs 42.55 at 14:38 IST on the BSE after the bank reported fraud by Bhusan Power and Steel.

The announcement was made on Saturday, 13 July 2019.

Meanwhile, the S&P BSE Sensex was up by 113.85 points or 0.29% to 38,850.08.

On the BSE, 9.40 lakh shares were traded in the counter so far compared with average daily volumes of 3.08 lakh shares in the past two weeks. The stock had hit a high of Rs 43.25 and a low of Rs 40.3 so far during the day. It hit a 52-week high of Rs 58.8 on 11 March 2019 and a 52-week low of Rs 33.25 on 9 October 2018.

Allahabad Bank informed that on the basis of forensic audit investigation findings and the CBI's FIR against the company and its directors, alleging diversion of funds from banking system by Bhushan Power and Steel (BPSL), a fraud of Rs 1774.82 core has been reported by the bank to the Reserve Bank of India (RBI). The bank has already made provisions amounting to Rs 900.20 crore against the exposure of the bank in BPSL.

It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from the consortium of banks. At present, the case is at NCLT which is in advance stage and the bank expects good recovery in the account.

Last week, the Punjab National Bank (PNB) also reported a fraud worth Rs 3805.15 crore by Bhushan Power and Steel.

Allahabad Bank reported net loss of Rs 3834.07 crore in Q4 compared with net loss of Rs 3509.63 in Q4 2018. Total income rose 8.1% to Rs 4602.86 crore in in Q4 March 2019 over Q4 March 2018.

Allahabad Bank is one the leading public sector commercial banks in India offering banking products and services to corporate, commercial customers and retail customers.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, July 15 2019. 14:40 IST