Canara Bank probes fraud in unit after whistleblower complaint: Report
By Nupur Anand
MUMBAI (Reuters) – Indian state-owned lender Canara Bank is investigating fraud in its housing finance unit Can Fin Homes, after a whistleblower complaint highlighted irregularities in certain accounts, said a direct source.
The whistleblower letter, sent at the end of December and also addressed to Reserve Bank of India and the National Housing Bank, said there were irregularities at one of the branches.
“We decided to act on this complaint given the severity of the situation and found out that there were frauds in 37 accounts worth 39 million rupees ($504,149.54). We have made provisions of an equal amount,” said the source, who declined to be named as the discussions were private.
Fake income tax return documents had been submitted for those accounts, the source said. An internal committee was still probing the matter to find out more about the nature of the fraud.
Canara Band and Can Fin Homes did not immediately respond to requests seeking comment.
Stocks of Canara Bank and Can Fin Home fell 8% and 7% respectively after media reports suggesting the central bank may also investigate the fraud. However, in a regulatory filing, Canara Bank said it had not received any intimation from the regulator about such an investigation.
RBI did not immediately respond to a request seeking comment.
Earlier this month, Canara Bank posted a net profit of 16.66 billion rupees for the quarter through March, compared to 10.11 billion rupees a year ago.
($1 = 77.3580 Indian rupees)
(Reporting by Nupur Anand; Editing by Bernadette Baum)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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