India’s second-largest money lender Punjab National Bank declared its Rs 3,600 crore exposure to Dewan Housing Finance (DHFL) as a fraudulent account.
The exchange filing, dated July 9, read: “A fraud of Rs 3688.58 crore in the NPA account of Dewan Housing Finance (DHFL) at Large Corporate Branch at Mumbai, Zonal Office, Mumbai. A fraud of Rs 3688.58 crore is being reported by the bank to RBI in the accounts of the company (DHFL).”
The filing undersigned by Company Secretary Ekta Pasricha further mentioned that the bank has already made provisions amounting to Rs 1246.58 crore as per prescribed prudential norms, which is in compliance with Sebi regulations.
As per Sebi rules, 100 percent provisioning is required in fraudulent accounts over a period of four quarters, and PNB has made a provision of Rs 1,246 crore thus far.
State Bank of India (SBI) and Union Bank of India (UBI) have already declared DHFL a fraud account, while private lender IndusInd Bank has reportedly also taken a similar action.
DHFL has accumulated a debt of over Rs 85,000 crore and its promoter Kapil Wadhawan is believed to have laundered huge sums of money to cut a deal with gangster Iqbal Mirchi. The Ministry of Corporate Affairs has initiated a Serious Fraud Investigation Office (SFIO) probe into the company. The Enforcement Directorate is also probing the company.
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