The state-owned Punjab National Bank (PNB) has reported a borrowing fraud of over 2,000 crore in IL&FS Tamil Nadu Power Co. Ltd.’s non-performing account.
The bank has reported a fraud of 2,060.14 crore to the RBI in the company’s accounts, according to a filing. The lender also stated that it has already made provisions totalling Rs.824.06 crore in accordance with prudential standards.
On the NSE, PNB shares closed 2.45 percent lower at 35.90 per share on Tuesday.
According to RBI guidelines, lenders must identify early signs of stress in loan accounts and classify such assets as special mention accounts as soon as they become delinquent (SMA).
SMA-0 – If a category fails to pay the principal or interest, it will be treated as a default case suitable for insolvency resolution due on them within 0-30 days.
SMA-1 – If a defaulter does not pay within 31-60 days, they will be prosecuted under the Insolvency and Bankruptcy Code (IBC). SMA-3 – Firms will be regarded to the National Company Law Tribunal (NCLT) if dues are not paid within 61-90 days.
The resolution plan will necessitate independent credit evaluation (ICE) of the residual debt by credit rating agencies (CRAs) generate strong by the Reserve Bank for this purpose if the aggregate exposure of lenders is 100 crore or more.