Finmin orders forensic audit of OBC, Dena Bank

MUMBAI/NEW DELHI: The finance ministry has ordered a forensic audit of Dena Bank and Oriental Bank of Commerce following reports of misappropriation of funds to the tune of ₹436 crore at the two public sector lenders. The lenders are alleged to have siphoned off the money (₹180 crore by OBC and ₹256 crore by Dena Bank) from their fixed deposit customers.

Forensic audit of companies’ accounts is carried out as part of investigations in cases of suspected financial irregularities.

Financial services secretary GS Sandhu said it was a case of aberration at the individual officer level and not systemic.

“These are instances that have happened at a branch level because of lack of due diligence or adherence to norms or procedures. Those responsible are being taken to task, there have been suspensions also, some disciplinary action, some transfers... Based on investigation further action will be taken. (In case of Dena and OBC), forensic audit has been ordered,” Sandhu said.

In a clarification to the BSE, Dena Bank has said that the bank’s Malabar Hill Branch received bulk term deposits from various entities/government organisations between January 30, 2014 and May 5, 2014. The funds were transferred out of the bank by creating fake overdraft facility, resulting in a fraud on the bank and the concerned entities. The bank has lodged a complaint with the CBI and suspended the erring branch manager.

“We have managed to recover ₹110 crore of the total ₹180 crore We are doing everything that we can to recover the remaining sum,” SL Bansal, CMD, Oriental Bank of Commerce told HT.

While Dena Bank shares tumbled 5%, Oriental Bank of Commerce fell 3.6% on the BSE following the news.

A consoritum of lenders led by Punjab National Bank recently ordered a forensic audit into the accounts and audit books of Bhushan Steel in an alleged cash for-loan scam involving Syndicate Bank chairman SK Jain.

The finance ministry recently initiated various steps to pre vent rising scams in public sec tor banks including separation of posts, longer tenure for bank chiefs and better quality of inde pendent directors, Sandu said.

“We are going to make it man datory for all senior officers at the DGM or GM level to undergo a compulsory risk management course before they are consid ered for promotion,” he said.