Shares of Punjab & Sind Bank, Allahabad Bank drop after lenders report fraud

The shares of Punjab & Sind Bank and Allahabad Bank on Thursday dropped as much as between 2.7 per cent and 6.4 per cent respectively.

Punjab & Sind Bank on Wednesday reported a ₹238 crore ₹ ($34.61 million) fraud to the Reserve Bank of India, relating to allegations of diversion of funds by the indebted Bhushan Power & Steel Ltd

It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks, Punjab & Sind bank said in a statement.

Allahabad Bank on Wednesday reported a ₹689 crore ($100.21 million) fraud related to textile company

SEL Manufacturing Ltd to the Reserve Bank of India. The fraud is already being heard by the country's company law tribunal, the bank said in a statement

Earlier this month, Punjab National Bank too reported similar frauds amounting to more than ₹3,800 crore by Bhushan Power & Steel.

Up to last close, Punjab & Sind Bank shares down 21.6% this year, while Allahabad Bank slipped 5.6% in the same period.