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Karnataka Bank reports Rs 13.26 crore fraud to RBI

"The bank has reported a fraud to RBI amounting to Rs 13.26 crore in the fund based working capital facility that was extended to SRS Finance," Karnataka Bank said in a filing to the Bombay Stock Exchange.

twitter-logoBusinessToday.In | March 23, 2019 | Updated 22:15 IST
Karnataka Bank reports Rs 13.26 crore fraud to RBI
Karnataka Bank on Saturday reported a fraud amounting to Rs 13.26 crore.

Private sector lender Karnataka Bank on Saturday said it has reported a fraud amounting to Rs 13.26 crore in the fund-based working capital facility extended to SRS Finance.

"The bank has reported a fraud to RBI amounting to Rs 13.26 crore in the fund based working capital facility that was extended to SRS Finance," Karnataka Bank said in a filing to the Bombay Stock Exchange.

The fraud was on account of "diversion of funds", the lender informed the exchange.

The bank said that it extended working capital facility under multiple banking arrangement and necessary accounting treatment has already been given as per the extant RBI guidelines.

SRS Finance is a non-banking financial corporation (NBFC) with focus on corporate finance and investments, and the consumer finance business.

Earlier this month, the central bank had imposed a fine of Rs 4 crore on Karnataka Bank for delayed implementation of four of the Swift related operational controls. Swift is the global messaging software used for transactions by the financial entities.

The massive Rs 14,000 crore scam at the Punjab National Bank (PNB) was a case of misuse of this messsaging software.

Post the PNB fraud, which came to light in February 2018, the RBI has been tough on banks to tighten all kind of their transactions.

(With PTI inputs)

Edited by Chitranjan Kumar

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