Rs 772 Crore Fraud Disclosed by IDBI Bank, Shares Plunge
The bank branches were defrauded are based in Andhra Pradesh and Telangana.
New Delhi, Mar 28: In another bank fraud detected, the IDBI Bank on Tuesday disclosed fraudulent loans amounting to Rs 772 crore. The fraud's brunt was felt by the state-run lender today as it's shares plunged by 1.7 per cent at the Bombay Stock Exchange.
The loans, which have been declared unprincipled by the bank, were issued between the fiscal years of 2009-13.
The tainted applicants had sought the loan for fish farming businesses, bank officials said while speaking to Reuters.
The lease documents submitted against the loans were fake in some cases, whereas, the collaterals were highly overvalued in others, the officials added.
An internal probe by the bank found two officials responsible for issuing the illicit loans amounting to Rs 772 crore. While one among the duo has already retired, the other has been suspended by the bank.
The Central Bureau of Investigation (CBI) has initiated probe in the case. The frauds were committed in the Telangana's Basheerbagh branch and Andhra Pradesh's Guntur branch.
The IDBI Bank in its earlier statement had said that a quality assurance audit has been launched by the bank, which is expected to be completed by April.
The shares of IDBI were hovering around Rs 74.95 by the time this report was published.
The Rs 772 crore scandal comes in the backdrop of another state-run lender, the Punjab National Bank, detecting a fraud amounting to Rs 12,600 crore. The bank was defrauded via illicit Letter of Undertakings issued in favour of companies linked to diamantaires Nirav Modi and Mehul Choksi.
(The above story first appeared on LatestLY on Mar 28, 2018 03:05 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).