The Punjab National Bank on Saturday said it has reported a borrowing fraud of Rs 3,805 crore by Bhushan Power & Steel Ltd to the Reserve Bank of India.

“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks,” the bank said in a stock exchange filing. “At present, the case is at NCLT [National Company Law Tribunal] which is in advance stage and the bank expects good recovery in the account.”

The state-owned bank said that it has already made provision of Rs 1,932.47 crore against this account.

The bank said the alleged “diversion of funds from the banking system” was reported to the RBI on the basis of the findings of a forensic audit and the Central Bureau of Investigation filing a first information report.

Bhushan Power & Steel Ltd. is one of the most indebted companies in the country and among the first 12 companies referred by the RBI to a bankruptcy court for a debt resolution process under the new insolvency law, Reuters reported.

The Punjab National Bank was defrauded of Rs 13,000 crore in another scam that came to light in 2018. Diamond merchant Nirav Modi and his uncle Mehul Choksi are accused of cheating the bank.