IDBI Bank shares plunge as loan fraud worth Rs 772 crore detected, CBI files cases
IDBI Bank Ltd said fraudulent loans of Rs 772 crore were issued from five of its branches in Andhra and Telangana, sending its shares lower on Wednesday
IDBI Bank Ltd's shares dropped on Wednesday, a day after the Mumbai-traded lender said fraudulent loans of Rs 772 crore ($118.8 million) were issued from five of its branches in Andhra Pradesh and Telangana.
IDBI's scrip was trading 2.95 percent lower at 13:32 pm on the BSE, after falling as much as 3.5 percent to Rs 73.6 rupees by 10:42 am, while the index for public sector lenders, the Nifty PSU Bank index, dropped as much as 1.8 percent.
The Central Bureau of Investigation (CBI), has registered cases for two of the five complaints, relating to branches at Basheerbagh and Guntur, the company said. IDBI continues to pursue all legal actions to recover the dues.
Some of the loans, which were issued during fiscal years 2009-2013 to fish farming businesses, were reportedly obtained against fake lease documents of non-existent fish ponds, and by inflating the value of collateral, the company said.
The company found major lapses in the processing and disbursing of the loans by two of its officials. The lender has dismissed one staffer, while the other has retired, it said.
"It was later discovered that some of these loans (52 aggregators with principal outstanding of Rs 772 crore) were fraudulently obtained by some industrialists who stood as common guarantor for these loans and were referred to as aggregators, by submitting fake lease documents of non-existent fish ponds," the bank said.
Further, empanelled valuers also inflated the value of collateral securities, the bank added.
IDBI also said that it has provided for these loans, to the extent of 100 percent, and hence there will be no further impact of these accounts on profitability or on the balance sheet of the bank.
The bank on Tuesday said it has initiated a quality assurance audit, expected to be completed by April.
With inputs from agencies
Amit Shah said BJP would end minority reservations in Telanagana and increase the quota for STs, SCs and backward classes
The Delhi High Court has not had a Chief Justice since Chief Justice D N Patel, retired and Justice Sanghi has been the acting CJ since 13 March, this year
Those appearing for APICET will be able to collect their admit card on 18 July while the results of the entrance test will be announced on 8 August.