Allahabad Bank shares fall nearly 15% on Rs 1,775-crore fraud by Bhushan Power

Shares of Allahabad Bank declined nearly 15% on Monday after the lender reported a fraud of over Rs 1,775 crore by Bhushan Power and became the second Indian state-owned bank to report a major alleged fraud by bankrupt steelmaker.

In Monday's early trading session, Allahabad Bank stock opened with a gap down pattern, registering a loss of 10.92% to Rs 42. Allahabad Bank share price later slipped 14.53% to an intraday low of Rs 40.30.

Allahabad Bank share price moved below its 30 day, 50 day, 150 day and 200 day simple moving average. Allahabad Bank share price has fallen over 12 % in one week, 14% in two weeks and around 1% in one month.

The public sector bank in a regulatory filing said it had told the Reserve Bank of India (RBI) that it had identified a fraud worth of Rs 1,774.82 crore in Bhushan's accounts.

"It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks," Allahabad Bank said.

Allahabad Bank has already made provisions amounting to Rs 900.20 crore against exposure of the bank in BPSL, the statement added.

Bhushan Power & Steel was among the first 12 companies referred by the RBI to a bankruptcy court for a debt resolution process under India's new insolvency law.

Last week, Punjab National Bank (PNB) reported a fraud worth Rs 3,805.15 crore by BPSL to the RBI, that included domestic exposure of Rs 3,191.51 crore at the PNB's Chandigarh branch, overseas exposure of Rs 345.74 crore at its Dubai branch and Rs 267.9-crore exposure at its Hong Kong branch.

Overall, 8.6 lakh shares and 107 lakh shares are currently changing hands on BSE and NSE, both above the 5, 10 and 30 day average volume traded. At 12:10 pm, share price of Allahabad Bank quotes Rs 42.30 on BSE and Rs 42.35 on NSE, respectively.

Also read: PNB detects Rs 3,805-crore fraud by Bhushan Power & Steel; accuses the firm of misappropriating funds, manipulating books

Also read: Bhushan Power & Steel fraud: After PNB, more lenders may report misappropriation of funds

Also read: Allahabad Bank reports $259 million alleged fraud by Bhushan Power & Steel

Edited by Rupa Burman Roy