Union Finance Minister Nirmal Sitharaman on Monday said the lending by a consortium of banks to ABG Shipyard had turned a non-performing asset (NPA) before Prime Minister Narendra Modi government came to power in 2014, adding that the banks have done a commendable job in detecting the fraud.
Addressing a press conference after the RBI board meeting here, Sitharaman said the ABG Shipyard account became an NPA in November 2013.
"After that, a consortium of banks all sat together to see how best any restructuring can be done, which is a due process. SBI has been the lead and ICICI bank is the other big bank that is exposed to this. So from 2014 onwards, this process is going on," she said.
"However, overall not just for this account in general, for any account of fraud or any element of any kind of major letting down of banks almost takes 52 to 54 months intensive work," the Finance Minister said.
Sitharaman further added, "In this particular case (ABG Shipyard) with that kind of commitment, actually I should give credit to the banks they've taken lesser than what is normally an average time to detect these kinds of frauds."
Elaborating on the process involved in the detection of the fraud, the Finance Minister said, "A forensic audit was done by E&Y. Case was handed over to the CBI in 2020 and in 2022 CBI has filed two cases in this matter. Meanwhile, the whole thing also went to National Company Law Tribunal (NCLT) for resolutions. Normally it takes 56 months and in this case, it has taken far lesser time to detect such things."
ABG Shipyard fraud is alleged to the tune of Rs 22,842 crore. This is the largest fraud detected in the Indian banking system so far. Much bigger than the one perpetrated by Nirav Modi and his uncle Mehul Choksi, who allegedly cheated Punjab National Bank to the tune of around Rs 14,000 crore.
Last week, the Central Bureau of Investigation (CBI) booked ABG Shipyard Limited and its former chairman and managing director Rishi Kamlesh Agarwal and others for the alleged cheating and fraud.
( With inputs from ANI )
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor