Mumbai: Union Bank of India on Friday hit 11-year low after the Central Bureau of Investigation (CBI) registered a Rs1,394.43-crore bank fraud case against Hyderabad-based Totem Infrastructure Ltd on a complaint by the state-run bank.
The stock fell as much as 9.11% to hit a low of Rs86.05, a level last seen on 8 March 2007. At 1.18pm, the scrip was trading at Rs86.95 on the BSE, down 8.2% from its previous close. So far this year, it declined 40%, while the Sensex fell over 4%.
“The company had diverted funds by opening accounts outside the consortium and through payments of wages by showing excess expenditure and inflated stocks. The entire sale proceeds were not allegedly routed through the dealing branches of consortium banks,” Mint reported.
The fraud came to light a day after CBI registered a case against Chennai-based Kanishk Gold and its promoters Bhoopesh and Neeta Jain for allegedly defrauding State Bank of India (SBI) and 13 other banks to the tune of Rs824.15 crore.
Earlier, Punjab National Bank unearthed a scam of $2 billion where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from a branch in Mumbai to secure overseas credit from other Indian lenders.
Banking stocks were under pressure. Syndicate Bank fell 6.8%, Bank of India 5%, Oriental Bank of Commerce 5%, IDBI Bank 5%, Corporation Bank 4.2%, Uco Bank 4%, State Bank of India 3%, Axis Bank 3.7% and Canara Bank was down 3.7%.
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