IDBI Bank now reveals fraudulent loans worth over Rs. 770cr
The latest Indian bank to reveal fraudulent loans is IDBI, which said Rs. 772cr had been issued as loans from five branches in Andhra Pradesh and Telangana against fake documents. There were major lapses in processing and disbursing of the loans during 2009-2013, most of which had been given to fish farming businesses, the bank said. It has now initiated a quality assurance audit.
Two bank officials involved, one dismissed, another already retired
According to IDBI, some of the fraudulent loans had been issued on the basis of fake lease documents of non-existent fish ponds. In other cases, the value of collateral was drastically inflated. Two bank officials were allegedly involved in the fraud. IDBI said it has dismissed one of them, while the other has already retired.
IDBI shares fell as much as 3.5% in early trade
The CBI has now lodged cases for two of the five complaints. These are related to IDBI's branches at Basheerbagh (Telangana) and Guntur (Andhra Pradesh). The audit ordered yesterday is expected to be completed by April. Meanwhile, IDBI's shares fell as much as 3.5% to Rs. 73.6 by 10.45am today. At 11:50am, they were trading 1.90% at Rs. 74.80 on BSE.
At least seven cases of bank fraud discovered till now
Before the IDBI case, at least seven bank frauds worth Rs. 23,500cr have come to light this year, including the Nirav Modi fraud (Rs. 12,650cr), Parekh Aluminium Ltd (Rs. 4,000cr), Rotomac Pens (Rs. 3,695cr), Totem (Rs. 1,394cr), Kanishk (Rs. 824cr) and Dwarka Das Seth (Rs. 390cr). Several banks, including SBI, Axis, Bank of Baroda, Union Bank and Oriental Bank of Commerce, have been hit.
