Banking fraud seems to have no end as the frequency of scams have been escalated to such a level that as many as seven banks have been named in the loan scandals after the nation's biggest bank scam unravelled at India's second largest PSU bank PNB.
Banking fraud seems to have no end as the frequency of scams have been escalated to such a level that as many as seven banks have been named in the loan scandals after the nation’s biggest bank scam unravelled at India’s second largest PSU bank PNB. Following the increased monitoring by the investigative agencies after Nirav Modi-PNB case, the latest fraud has erupted at another Gujarat-based firm. According to a PTI report, the Central Bureau of Investigation has registered a criminal case against a Vadodara-based firm which primarily deals in electric equipment and its respective directors on Thursday.
The directors of Diamond Power Infrastructure Ltd have allegedly defrauded a consortium of banks headed by Axis Bank to the tune of Rs 2,654 crore. The Central Bureau of Investigation had also carried out searches at the official and residential premises of Diamond Power Infrastructure Ltd and its directors in Vadodara, Gujarat. “It is alleged that DPIL, through its management, (had) fraudulently availed credit facilities from a consortium of 11 banks (both public and private) since 2008, leaving behind an outstanding debit of Rs 2,654.4 crore as on June 29, 2016,” PTI said in a report.
In the loan fraud case of Rs 2,654 crore allegedly involving Diamond Power Infrastructure Ltd three bankers namely Bank of India, Bank of Baroda and ICICI Bank collectively have an exposure of Rs 1298.96 crore. Bank of India has an exposure of Rs 670.51 crore; Bank of Baroda has an exposure of Rs 348.99 crore and the country’s third-largest lender ICICI Bank has an exposure of Rs 279.46 crore, PTI reported citing CBI FIR.
The said was declared as a non-performing asset in the fiscal year 2016-2017. At the time of formation consortium way back in 2008, India’s third-largest private sector lender Axis Bank was the lead banker for the term loan and the state-owned Bank of India was the lead banker for cash credit limits, as per a PTI report. The Central Bureau of Investigation has alleged that Diamond Power Infrastructure Ltd absorbed the cash credit limits extended by the banks for obtaining a large number of letters of credits, and many of them could not be honoured by the company, PTI report added.