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Karnataka Bank reports Rs 40.39cr fraud by Hanung Toys and Textiles

Press Trust of India  |  New Delhi 

Private lender Karnataka Bank on Wednesday said it has reported to the RBI a fraud of Rs 40.39 crore in the credit facilities to Hanung Toys and Textiles Ltd, which has already been declared a non-performing borrowing account.

Hanung Toys and Textiles Ltd (borrowing account) dealing with the bank since 2008 had availed various credit facilities under consortium arrangement wherein, Karnataka Bank was one of the member banks, it said in a regulatory filing.

"On the basis of forensic auditor's report submitted to the consortium, some of the member banks have reported to the Reserve Bank of India (RBI) regarding fraud in the borrowing account.

"In line with the Consortium decision, Karnataka Bank has reported to RBI a fraud amounting to Rs 40.39 crore in the credit facilities extended earlier to the borrowing account, on account of diversion of funds," Karnataka Bank said.

The lender said that the borrowing account was classified as non-performing asset (NPA) in July 2015 and had been fully provided for and as such, no negative impact on the bank's profitability at present.

Earlier in November, Authorities at Delhi airport had detained debt-ridden Hanung Toys promoter Ashok Kumar Bansal and his wife Anju Bansal following lookout circular (LOC) issued by Punjab National Bank (PNB).

Hanung Toys and Textile Ltd owes Rs 2,300 crore to a consortium of 15 lenders led by state-owned PNB, which alone has exposure of Rs 599 crore.

PNB had issued 13 LOCs including one against the promoter of Hanung Toys.

Several banks of the consortium have already declared the company a wilful defaulter.

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

First Published: Wed, December 04 2019. 20:30 IST