State-owned lender Punjab and Sind Bank on Tuesday declared Srei Infrastructure Finance and SREI Equipment Finance Ltd accounts as fraud. The lender said both the companies facing insolvency proceedings are non-performing assets (NPAs).
"It is informed that the NPA accounts- SREI Infrastructure Finance Ltd (SIFL) with outstanding dues of Rs 510.16 crore and Srei Equipment Finance Ltd (SEFL) with outstanding dues of Rs 724.18 crore have been declared as fraud and reported to RBI today as per regulatory requirement," Punjab and Sind Bank said in a regulatory filing.
The lender said it has fully provided for both the accounts as per the regulatory norms.
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Meanwhile, Srei Group said it is planning to take necessary legal action against the bank's decision. "It is unfortunate that a PSU has taken such a step - even when the KPMG report, on which the decision has seemingly been based - is still sub-judice," the group said.
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In October last year, the RBI had superseded the board of directors of SIFL and SEFL and appointed an administrator, following governance issues and default in payment obligations.
It also initiated a corporate insolvency resolution process against both the Srei Group companies. According to some estimates, banks have about a Rs 28,000 crore exposure to Srei and bondholders another Rs 18,000 crore.
In its Q3 FY2022 results call, Canara Bank had said its total exposure to SIFL and SEFL was Rs 3,100 crore. Indian Bank, Bank of Maharashtra, and IDBI Bank have an exposure of Rs 650 crore, Rs 550 crore and Rs 400 crore, respectively, to the firms. Lenders have declared these accounts as NPA and have made adequate provisions.
First Published: Apr 20, 2022 12:00 AM IST
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