Again Alleged Fraud by Top Private Banks for Loans

 

Two of the country top new generation private sector banks Axis Bank and Kotak Mahindra Bank have complaint of alleged fraud to the tune of INR 1200 Crores against travel and leisure company Cox & Kings Limited.

The investigation has been started by Economic Offense Wing of Mumbai City Police but officials of the travel firm say that its an routine inquiry.

The preliminary enquiry was already registered against the company on the basis of complaint from a third bank that is Indusind Bank which has alleged a default in payment of INR 239 Crores.

Now Kotak Bank in its complaint, stated that it has been extending financial faciliteis to the travel fir since 2012, and on June 24 , 2019 outstanding amount stood at INR 175 Crores.

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After default Bank appointed PWC ( Price-Water-House-Coopers ) to do a forensic audit. Its two draft report and mentioned irregularities and fraudulent practices of some of oice beares of the travel company.

The first draft interim report also said that there was receivable of INR 450 Crores from 15 parties and all these transactions were suspicious in nature and that the bank had all reason to believe they were fictitious. These 15 parties had common and on teh same day in the travel firm's system in August 2012, the police said. ON a visit to the addresses, it was found that the parties were not located there. Kotak Mahindra Bank said it has incurred a loss of 175 Crores.

As for Axis Bank it submitted a complaint that some office-bearers of the travel firm and its sister concerns had availed loan facilities to the tune of INR 1030 Crores and cheated the bank by not repaying. In both cases, FIRs are yet to be registered.

The the investigation & probe is being supervised by chief of EOW Mr Rajvardhan Sindha, and headed by inspector Kishore Parad who led the Punjab & Maharashtra Bank,s Rs 4700 Crores con probe.

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Our Analysis and Questions :

1. Why every time if any NPA happens then bank declare the NPA account as fraud.

2. It was more prevalent with Public Sector Banks in India now we are seeing Private Banks also following the same footstep. Can it be the end of dream run for Private Banks by charging higher interest on riskier assets.

3. Why not during the annual assessment bank could not see the amount was going into bogous / shell companies ?

4. What was banks Internal and External auditors doing with their inspection of the said loan ?

5. In all we can say that , if borrowers not giving back the loan then make them as fraud. The story is same with both Public Sector banks and Private sector banks as they banks do not want to take blame on their top management for NPA of the accounts .

6. Your comments & discussions are awaited.