State-run Punjab National Bank (PNB) on Thursday has reported a borrowal fraud of Rs 3,688.58 crore in the NPA account of the now-bankrupt Dewan Housing Finance Ltd (DHFL).
In a regulatory filing, the PNB said that it has already made provisions amounting to Rs 1,246.58 crore.
"A fraud of Rs 3,688.58 crore is being reported by the bank to RBI in the accounts of the company (DHFL). Bank has already made provisions amounting to Rs 1,246.58 crore, as per prescribed prudential norms," it said.
Indian state-owned lender PNB, which was hit by a $2 billion fraud involving billionaire Nirav Modi in 2018, had already set aside 12.5 billion rupees in provisions for the loans to DHFL, which is in bankruptcy proceedings.
Indian banking regulations require the provision on an account affected by fraud to be 100%, made over four quarters. DHFL, which was once one of India's top "shadow" lenders, accumulated total debts of almost 1 trillion rupees and then failed to honour dues to its creditors.
Indian authorities are investigating DHFL's promoters and its loan book to determine the extent of any fraud.
Other banks including State Bank of India and Union Bank have also reported DHFL's accounts as fraudulent.
DHFL promoters arrested
Last November, the Reserve Bank of India (RBI) superseded the Board of Directors of the company and appointed an administrator and accordingly, the board powers were vested in the firm's administrator.
Further, the Mumbai-bench of the National Company Law Tribunal (NCLT) at Mumbai commenced the CIRP against the company in December, following an application by the RBI.
The company reportedly has debt of around Rs 97,000 crore and has allegedly siphoned off Rs 31,000 crore from the total bank loans.
Its promoters Kapil Wadhawan and Dheeraj Wadhawan were arrested by the Central Bureau of Investigation in April.
(With agency inputs)