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Digital Identity, Security & Online Fraud

USD 556 mln lost by Punjab National Bank to fraudulent buying

Tuesday 9 July 2019 | 10:54 AM CET

The Wall Street Journal has revealed that Punjab National Bank had been defrauded USD 556 million from a borrower, Bhushan Power & Steel.

This is the second incident that’s come to light, as two men with the country’s jeweler, Firestar Diamond, were accused of manipulating bank insiders to borrow billions without the proper approval from the bank. Moreover, Punjab National Bank filed complaints with the Reserve Bank of India and the police after discovering Bhushan’s involvement with the loan money.

The National Bank argued that the company misappropriated bank funds and manipulated books of accounts to raise funds from consortium lender banks. Bhushan is currently dealing with its own debt issues in bankruptcy court. On the other hand, the company related to the second scandal, Firestar Diamond, filed for bankruptcy in the US as well, mentioning that liquidity and supply chain issues were the reason it had to file for bankruptcy. Also, two employees at a Mumbai branch of Punjab National Bank have been accused of conspiring with the diamond company, by giving it fake documents that let it obtain credit.

More: Link
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