Punjab and Sind Bank reports IL&FS account with Rs 399 crore outstanding as fraud to RBI

Public-sector bank on Thursday said it has declared its IL&FS NPA account with Rs 399 crore outstanding loan as fraud and has reported it to the Reserve Bank. Further, the bank has already made 100% provisioning of the account as per the prescribed prudential norms and the account is technically written off.

In a regulatory filing, the bank said, "Having regard to the Bank's policy on determination and disclosures of material events, it is informed that an NPA Account, viz. M/s Infrastructure Leasing & Financial Services LTD (IL & FS) with outstanding dues of Rs.399.31 crore has been declared as fraud and reported to RBI today as per regulatory requirement. Further, the account has been fully provided for as per existing RBI norms."

The scam at the IL&FS group came to light in September 2018 after several group entities defaulted on repayments due to severe liquidity problems.

Besides, the bank has issued and allotted 335 crore Equity Shares of Rs 10 each of the Bank for cash at an issue price of Rs 16.41 per equity share (including premium) to the Government of India aggregating to Rs 5500 crore on a preferential basis. With the allotment Government of India holding has increased from 83.06 per cent to 97.07 per cent.

The equity shares so allotted shall rank pari passu with the existing equity shares of the Bank including dividend if any.