This Infra player's bank account declared 'fraud'
New Delhi: There is no end to the closure saga of the beleaguered infra player Lanco Infratech. Now Punjab & Sind Bank has declared the account of the infra firm as ‘fraud’ account.
In a regulatory filing, the bank has said the NPA account of Lanco is being declared as fraud. He bank had exposure of Rs 215 crore towards the company.
“It is informed that an NPA account Lanco Infratech Limited with outstanding dues of Rs 215.17 crore has been declared as fraud and reported to RBI today as per regulatory requirement,” the bank said in the filing.
Punjab & Sind Bank also said that it had fully provided for the NPA account.
Lanco Infratech’s account was among the first 12 accounts that were mentioned by the Reserve Bank of India for (RBI) insolvency (CIRP). The company, now defunct, owes around Rs 44,000 crore to a consortium of banks led by IDBI.
If an account is declared ‘fraud’, commercial banks are required to set aside 100 percent of the outstanding loans as provisions. This can be done in one go or can be spread over 4 quarters, as per the provisions set out by RBI.