MUMBAI Aug 20 India is investigating the
alleged misappropriation of more than 4 billion rupees ($66
million) from branches of the state-run Dena Bank Ltd
and Oriental Bank of Commerce Ltd in Mumbai, a senior
government official said.
The alleged embezzlement comes weeks after the head of
another state-run lender, Syndicate Bank Ltd, was
detained over allegations he had sought bribes to favour
G.S. Sandhu, a top finance ministry official, told reporters
on Wednesday that a forensic audit of two Dena and Oriental Bank
branches in Mumbai was being conducted.
"Investigations are on. Based on the investigations, further
action will be taken," Sandhu told reporters in Mumbai. "Those
persons who are responsible, they are being taken to task," he
said, calling the incidents "very individual and specific".
A committee appointed by the central bank in May called
corruption in state banks a major "public policy concern" and
recommended the federal government cut its stake in these banks
to below 50 percent.
Dena Bank said in a regulatory filing that about 2.23
billion rupees were "surreptitiously transferred out" of the
bank by the creation of a fake overdraft facility.
The lender took a provision of 542.9 million rupees last
quarter because of the "fraud" and will take the remainder
during the current fiscal year, it said.
Dena has suspended the branch manager and transferred the
staff of the branch, it said.
In a separate filing, Oriental Bank reported the
"surreptitious transfer" of about 1.8 billion rupees from one of
its Mumbai branches in February, adding it had reported the
incident to the central bank and the finance ministry.
Dena Bank shares fell 5 percent on Wednesday, while Oriental
Bank shares closed 3.6 percent lower in a Mumbai market that was
down 0.3 percent.
($1 = 60.6100 Indian rupees)
(Reporting by Devidutta Tripathy; editing by David Clarke)