IDBI Bank reports ₹772 cr. fraud

CHENNAI: IDBI Bank has reported that fraudulent loans to the tune of ₹ 772 crore were issued five of its branches in Andhra Pradesh and Telangana.

These loans for fish farming business were sanctioned during fiscal years 2009-2013.

``It was later discovered that some of these loans (52 aggregators with principal outstanding of ₹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.

The empanelled valuers also inflated the value of the collateral securities, it added. ``While recovery was achieved in certain accounts, most of the accounts turned non-performing assets (NPA) from fiscal 2014 onwards,’’ the bank said in a filing with the BSE.

While conducting staff accountability exercise, the bank found that there were major lapses in processing and disbursing the loans. The bank had since filed five separate complaints with CBI for further investigation in respect of these cases.

The bank said it had already provided for these loans to the extent of 100% and, hence, there was no further impact of these accounts on the profitability / balance sheet. The IDBI Bank shares have taken a beating the market in the wake of this disclosure.