The Punjab National Bank on Thursday told the BSE in an exchange filing that a Rs 3,688 crore borrowal by Dewan Housing Finance Limited was fraudulent by the recipient firm.
“A fraud of Rs 3688.58 Crore is being reported by Bank to RBI [Reserve Bank of India] in the accounts of the Company,” the Punjab National Bank said in a statement. “Bank has already made provisions amounting to Rs 1246.58 Crore, as per prescribed prudential norms.”
Rules set by the Securities and Exchange Board of India prescribe that 100% provisioning is required in fraudulent accounts over a period of four quarters, Moneycontrol reported. State Bank of India, Union Bank of India and IndusInd Bank have already declared DHFL a fraud account.
DHFL has accumulated a debt of over Rs 85,000 crore, and its founder Kapil Wadhawan has allegedly laundered huge sums of money to make a deal with gangster Iqbal Mirchi. The Ministry of Corporate Affairs has set the Serious Fraud Investigation Office on the case. The Enforcement Directorate is also investigating the company.
In September 2018, after the IL&FS crisis emerged, DHFL’s stock also took a hammering by as much as 60%. Then, in January, Cobrapost claimed that the company’s promoters were involved in a Rs 31,000 crore scam to siphon off money. The company denied these claims.
The Central Bureau of Investigation arrested DHFL promoters Kapil and Dheeraj Wadhawan from a coronavirus quarantine facility in Mahabaleshwar town of Satara district on April 26. The two brothers, who are accused in the Yes Bank and DHFL fraud cases, were arrested with the help of district authorities through a non-bailable warrant. On May 15, they were arrested by the Enforcement Directorate.
Punjab National Bank had in 2018 reported a fraud worth over Rs 13,000 crore by diamond merchants Nirav Modi and Mehul Choksi. Both Modi and Choksi have fled abroad. Modi is being tried by a court in London.