PNB reports borrowing fraud in NPA account

The Punjab National Bank (PNB) reported a borrowable fraud of Rs 2,060.14 crore in a non-performing asset account. The fraud was reported in the NPA account of IL&FS Tamil Nadu Power Company Ltd. at Extra Large Corporate Branch at Delhi.

IL&FS Tamil Nadu Power Company was set up as a special purpose vehicle (SPV) by the debt-laden Infrastructure Leasing & Financial Services Ltd (IL&FS) under its energy platform IEDCL for implementation of thermal power projects at Cuddalore in Tamil Nadu.

The same account has been declared as fraud by another public sector bank – Punjab & Sind Bank – over outstanding dues of Rs 148 crore. As per the bank’s policy on determination and disclosures on material events, PNB said it has declared this non-performing account (NPA) as a fraud account.

The filing said, “A fraud of Rs 2,060.14 crore is being reported by Bank to RBI in the accounts of the company.” It added that the bank has already made provisions amounting to Rs 824.06 crore as per the prescribed prudential norms.

Last month, Punjab & Sind Bank had also declared IL&FS Tamil Nadu Power Company's NPA account, with dues of over Rs 148 crore, as a fraud account and reported it to the Reserve Bank of India (RBI).