In a spree of arrests taking place for the frauds happening in various banks, another fraudulent case has come to light recently. This time, the former UCO bank CMD Arun Kaul has been arrested along with others by the CBI for allegedly being involved in a scam worth Rupees 621 Crore with the bank. Reports say that the CBI will soon question the former Chairman and Managing Director Kaul in connection with its ongoing probe. In total, after the fraud siphoning of Rs. 621 crore, the bank is at a loss of Rs 737 crore.
According to reports, the investigating agency is carrying out a search rigorously at 10 locations out of which eight is in Delhi and the other two in Mumbai. Moreover, the accused persons have been alleged of siphoning Rs. 621 crore from bank loans over a period of time. Besides, the ex-CMD, other people arrested in connection with the case are CMD Hem Singh Bharana of Era Engineering Infra India Ltd (M/s EEIL), two chartered accountants — Pankaj Jain and Vandna Sharda — Pawan Bansal of M/s Altius Finserve Pvt Ltd, and other unidentified persons. Also, the loan sanctioned for the bank was not utilized for the intended purpose, as per reports in a leading daily.
This will affect the bank’s economic status as it will venture into more loses. Even the UCO bank stock price will remain under pressure the following week. Meanwhile, it has also been reported that the bank’s profitability is at stake and is said to remain under pressure over the FY18-19E because of provisioning requirement, higher credit cost and restrictions by RBI under prompt corrective action, valuing at 0.35x FY20E P/BV.For all the latest Business News, download NewsX App