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Another bank fraud exposed: IDBI Bank discloses Rs 772 crore fraudulent loans, says report; shares plunge 3.5%

The bank revealed that some of these loans were issued during fiscal years 2009-2013 for fish farming businesses and they were obtained against fake lease documents of non-existent fish ponds and by inflating the value of collateral.

Edited by: India TV Business Desk, New Delhi [ Updated: March 28, 2018 14:30 IST ]
Image Source : PTI

IDBI Bank

In yet another case of bank fraud, state-run lender IDBI Bank Limited on Tuesday disclosed that fraudulent loans worth Rs 772 crore ($118.8 million) were issued from five of its branches in Andhra Pradesh and Telangana, news agency Reuters reported.

According to the report, the bank revealed that some of these loans were issued during fiscal years 2009-2013 for fish farming businesses and they were obtained against fake lease documents of non-existent fish ponds and by inflating the value of collateral.

After the disclosure, the shares of the IDBI bank plunged by 3.5 per cent to Rs 73.6 by 0512 GMT (10:42 IST) on Wednesday while the index for public sector lenders Nifty PSU Bank index dropped as much as 1.8 per cent.

The Reuters report added that the IDBI bank has found major lapses in processing and disbursing the loans by two of its employees.

The bank has dismissed one of these officials while the other official had already retired, the report added.

According to the bank, the Central Bureau of Investigation (CBI) has registered cases for two of the five complaints, relating to the branches at Basheerbagh and Guntur.

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