NewsClick

NewsClick
  • हिन्दी
  • Politics
  • Economy
  • Covid-19
  • Science
  • Culture
  • India
  • International
  • Sports
  • Articles
  • Videos
search
menu

SUBSCRIBE AND SUPPORT

image/svg+xml
  • All Articles
  • Newsclick Articles
  • All Videos
  • Newsclick Videos
  • हिन्दी
  • Politics
  • Economy
  • Science
  • Culture
  • India
  • Sports
  • International
  • Africa
  • Latin America
  • Palestine
  • Nepal
  • Pakistan
  • Sri Lanka
  • US
  • West Asia
About us
Grievance Redressal Mechanism
Newsletter
Facebook - Newsclick Twitter - Newsclick Instagram - Newsclick Youtube - Newsclick RSS - Newsclick
close menu
×
You deserve independent, critical media. Subscribe and Support
Politics
India
Economy

Punjab National Bank Delayed Red Flagging Rs 3,688 Crore DHFL Loan as Fraud

The bank’s revelation comes at a time while forensic audit of DHFL books is ongoing alongside the company’s resolution process.
Prudhviraj Rupavath
10 Jul 2020
Punjab National Bank Delayed Red Flagging Rs 3,688 Crore DHFL Loan as Fraud

Representational Image. Image Courtesy: The Financial Express

Government owned Punjab National Bank (PNB) on July 9 said it has reported a fraud of Rs 3,688.58 crore in a non performing account (NPA) of Dewan Housing Finance Ltd (DHFL) to the Reserve Bank of India (RBI). The bank’s revelation comes at a time while forensic audit of DHFL books is ongoing alongside the company’s resolution process. 

Observers raised doubts over PNB bank’s delay in reporting DHFL account as fraudulent citing long standing allegations against the housing finance company and several ongoing probes on both the bank and the company. 

“A fraud of Rs 3,688.58 crore is being reported by Bank to RBI in the accounts of the Company (DHFL),” PNB said in a stock exchange filing and added that the bank has already made provisions amounting to Rs 1,246.58 crore, as per prescribed prudential norms. 

Corporate insolvency resolution process of DHFL began in December last year at the National Company Law Tribunal (NCLT), Mumbai bench after the company began defaulting its debt repayment obligations and failed to achieve a resolution plan with its lenders, thus becoming the first financial services company to go for insolvency under Insolvency and Bankruptcy Code (IBC). 

As on March 20, the amount claimed by financial creditors, including banks and non-convertible debenture holders of DHFL, as admitted by the NCLT stood at Rs 81,140 crore. Of this, PNB has claimed Rs 1,222.41 crore. 

“PNB needs to clarify on why it has delayed in red flagging the fraudulent account of DHFL accounts,” said Thomas Franco, former General Secretary of All India Bank Officers’ Confederation, as “suspicions on DHFL transactions have been in public domain for more than a year now”.

Also watch: What Led to the PNB Fraud? Thomas Franco Answers

“This DHFL fraud of Rs 3,688 crore makes its second only to Nirav Modi’s scam within PNB,” Franco pointed out.  

The Central Bureau of Investigation (CBI), which has been probing fraudulent transactions involving PNB bank officials and diamond merchant Nirav Modi and his companies, has estimated the fraud to the tune of Rs 23,780 crore. 

Financial Express in January had reported that three banks — State Bank of India (SBI), Union Bank of India and IndusInd Bank — have red-flagged the exposure to DHFL as fraud accounts. 

Troubles inside DHFL began in late 2018 with the sudden collapse of Infrastructure Leasing and Financial Services (IL&FS) that sent shockwaves across the financial services sector as the company faced liquidity concerns. Following this, in January 2019, investigative news portal Cobrapost had claimed that DHFL had siphoned off Rs 31,000 crore of public money “through grants of loans and advances to shell companies and by using other means”. This prompted the Serious Fraud Investigation Office (SFIO) to launch a probe into the transactions of the company which is currently ongoing. 

In October last year, a special audit by auditing firm KPMG found that DHFL was involved in dubious transactions benefitting its promoters to the tune of about Rs 24,000 crore. 

R Subramaniakumar, the RBI appointed administrator of DHFL, in January this year, has ordered three transaction audit reports by Grant Thornton to examine the allegations of related-party and fraudulent transactions.

The CBI in April arrested Kapil Wadhawan and Dheeraj Wadhawan, promoters of DHFL in a case related to financial irregularities between the company and the Yes Bank. The investigative agency is probing the role of Wadhawan brothers regarding allegations that DHFL received Rs 3,700 crore of loan from Yes Bank fraudulently through dubious transactions involving Rana Kapoor, the erstwhile promotor of the private bank. 

Get the latest reports & analysis with people's perspective on Protests, movements & deep analytical videos, discussions of the current affairs in your Telegram app. Subscribe to NewsClick's Telegram channel & get Real-Time updates on stories, as they get published on our website.
Punjab National Bank
DHFL
Dewan Housing Finance Limited
Yes Bank
Wadhawans
RBI
Fraud
NPA
PNB
Nirav Modi
IL&FS
CBI
DHFL Insolvency
Related Stories
WB Chit Fund Scam: With Refund Process Stuck, Victims Threaten Gherao of Nabanna

WB Chit Fund Scam: With Refund Process Stuck, Victims Threaten Gherao of Nabanna

WB HC

WB: HC Orders Removal of TMC’s Manik Bhattacharya as Primary Education Board Chairman

Kolkata HC Orders CBI Probe Into Recruitment of Primary Teachers

Kolkata HC Orders CBI Probe Into Recruitment of Primary Teachers

RBI Officers’ Association Seeks Review of Unified

RBI Raises Inflation Projection to 6.7% From 5.7% for 2022-23

Stop Rape

Pressure Mounts on KCR Govt Over Hyderabad Rape Even as 2 Juveniles Arrested; Police Pulled up for Delayed FIR

gurumurthy

Bank Unions Demand Gurumurthy's Sacking From RBI Board for Offensive Comments Against Bank Employees

TMC

Accused in Bank Fraud Case Made Chairman of Govt Committee in West Bengal

WB: Education Minister Interrogated by CBI in SSC Scam

WB: Education Minister Interrogated by CBI in SSC Scam

Paresh Chandra Adhikari

WB: High Court Dismisses Daughter of Minister Paresh Adhikari From Teachership

Farmers are demanding a bonus on wheat as their yield has dropped and shriveled because of unprecedented heatwave conditions.

Punjab: Heavy Police Deployed at Chandigarh-Mohali Border as Farmers Plan Indefinite Protest

Share on FacebookShare on TwitterShare on WhatsAppShare via EmailShare on RedditShare on KindlePrint
Share
Share on FacebookShare on TwitterShare on WhatsAppShare via EmailShare on RedditShare on KindlePrint
Share
You deserve independent, critical media. We want readers like you. Support independent, critical media. Subscribe to Newsclick.

Subscribe and Support


Latest

  • Saji Cheriyan

    Kerala Minister Saji Cheriyan Resigns From Cabinet Posts Over Constitution Remark Row

  • wo militants surrendered in front of security forces during an encounter in the Hadigam area of South Kashmir

    J&K: Two LeT Militants Surrender During Encounter After Family Appeals

  • Construction workers Delhi.

    CAG Flags Distortion in Death Compensation for Delhi Construction Workers

  • MP: ‘RTI Activist Shot Dead in Vidisha had Filed 130 RTI Applications, Mainly Concerning PWD’

    MP: ‘RTI Activist Shot Dead in Vidisha had Filed 130 RTI Applications, Mainly Concerning PWD’

  • Load More
Newsletter
About us
Grievance Redressal Mechanism