Canara Bank says exposure to Transstroy consortium lending at Rs 678 cr

The Central Bureau of Investigation (CBI) has booked Hyderabad-based Transstroy India and its directors for alleged bank fraud of over Rs 7,926 crore.

Canara Bank clarified to the bourses on Saturday (19 December 2020) that Transstroy India was enjoying limits from various banks under multiple banking arrangements from 2001. Subsequently, a consortium with Canara Bank as leader with 13 other banks was formed in 2013 and the total limit sanctioned was Rs 4765.70 crore. The share of Canara Bank in the consortium is only Rs 678.28 crore.

The account was declared as fraud and reported to the Reserve Bank of India (RBI) on 10 February 2020. Canara Bank said it has made 100% provision for this account as per the prescribed prudential norms. The company was declared as willful defaulter on 26 December 2018 by the bank.

Out of 7926.01 crore fraud amount appearing in the media, the amount of lending made by all the 14 consortium members is Rs 4765.70 crore. Remaining amount was lent under multiple banking arrangement. Out of this, exposure of Canara Bank is Rs 678.28 crore only.

The case was referred to National Company Law Tribunal (NCLT) and was admitted by NCLT, Hyderabad on 10 October 2018. The company is under the process of liquidation.

Canara Bank is a state-owned commercial bank. The Government of India held 78.55% stake in the bank as of 30 September 2020.

The PSU lender reported 21.8% jump in net profit to Rs 444.41 crore on 44.1% rise in total income to Rs 20,836.71 crore in Q2 September 2020 over Q2 September 2019.

Shares of Canara Bank were down 1.31% to Rs 120.10. It traded in the range of 114.40 and 121.40 so far during the day.

Powered by Capital Market - Live News

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel