Canara Bank is the latest in the list of public sector banks to report a banking fraud. The Central Bureau of Investigation (CBI) on Wednesday booked a Kolkata-based computer company RP Infosystems ltd and its directors in a Rs 515.15-crore banking fraud case. The CBI acted on a complaint filed by Canara Bank deputy general manager DV Prasad Rao on February 26 alleging that RP Infosystems directors Shivaji Panja, Kaustav Kaustuv Ray and Vinay Bafna, and vice-president (finance) Debnath Pal cheated the bank and 9 other member banks of a consortium to the tune of Rs 515.15 crore.
This is the fifth case of loan related fraud the CBI has registered since billionaire jewellery designer Nirav Modi was accused of defrauding Punjab National Bank (PNB) of nearly Rs 12,636 crore earlier in February. After PNB and Bank of Baroda, other public sector banks too seem to be rushing to the CBI with fraud cases.
The complainant alleged the fraud was committed through the borrowal accounts of the company in criminal conspiracy with bank officials on a 10-member banks of the consortium comprising Canara Bank, State Bank of India, State Bank of Bikaner & Jaipur, Union Bank of India, Allahabad Bank, Oriental Bank of Commerce, Central Bank of India, Punjab National Bank, State Bank of Patiala, and Federal Bank. False and fabricated stock/receivables/debtors statements, forged drawing power letter were sued to cheat the banks.
Canara also alleged that letters of Credit (lCs) issued by various member banks had started devolving since 2012 as the funds were not maintained. “There are about 10 lCs devolved during the period from December 2012 to February 2013 amounting to Rs 41.39 crore. All the lCs were opened locally and with lorry receipts issued by local transport operators. The company has not routed the pro rata sales through the account. In 2014, the company has written off inventory of Rs 397.62 crore and debtors of Rs 499.30 crore and provided provision to bad debt amounting to Rs 222.57 crore which resulted in sharp decrease in debtors from Rs 821.68 crore as of March 31, 2013 to Rs 105 crore as of March 31, 2014,” the bank stated in the complaint.
The complainant alleged that RP Infosystems did not route the sale proceeds through the loan account and siphoned off the entire amount.
It also inflated its receivables, it was alleged. Some of the purported debtors, viz, Gail India, Vincent Electronics (Rourkela), CEAT ltd had informed State Bank of India that they had no dealing with RP Infosystems. The other member banks of the consortium had authorised Canara Bank to lodge the consolidated complaint, according to the FIR.
The accused company RP Infosystems was doing the business of manufacturing and trading of desktops and laptops across the country under the brand name ‘Chirag’ and servicing of computers, networking, integration and other hardware related products in different parts of the India having its registered office at lalbazar street and corporate office at Regent House fourth floor opposite Raj Bhawan in Kolkata.
“In spite of disubursement of the various amount pursuant to sanction of various credit facilities granted by the consortium member banks, the said company has failed and neglected to pay the dues of the consortium banks, reason for which the loan accounts became irregular in course of time and the loan accounts of the company have been classified as non-performing assets (NPA) by the consortium banks and financial institutions,” the bank stated in the complaint.
According to sources, one of the company directors, Shibaji Panja, booked by the CBI, had been arrested earlier by the Delhi Police in connection with defrauding banks. In February 2015, Panja had been dramatically arrested while returning from Dhaka. The West Bengal Police had detained him on the basis of a lookout circular issued by Economic Offences Wing of the Delhi Police. Panja had accompanied West Bengal Chief Minister Mamata Banerjee as a non-official delegate to Bangladesh on a three-day visit. Mamata had at that time distanced herself from Panja. The CBI in June 2015 booked Panja and RP Infosystems along with other directors for allegedly pulling off a loan fraud to the tune of Rs 180 crore on IDBI bank.
In the present case, the CBI has booked Panja, along with Kaustuv Ray and Vinay Bafna (both directors in the company) and vice-president (Finance) Debnath Pal, apart from unknown officials of Canara Bank. Kaustuv Ray and Vinay Bafna had been booked by CBI earlier as well in 2015, along with Panja.