Dena Bank readies forensic audit report

Chennai: Dena Bank is now monitoring all online transactions above Rs. 5 crore even and the forensic audit of the lender's Malabar Hill branch in Mumbai, involved in an alleged siphoning off of funds, is expected to be ready soon, a top official has said.

"The forensic audit report is expected to be ready. We are now monitoring all online transactions over Rs.5 crore," Dena Bank chairman and managing director Ashwani Kumar told reporters in Chennai on Saturday.

When asked about internal alerts as each bank branch is subject to audits by outside auditors, he said, "There were no internal alerts." He also said he was not sure whether such a thing has happened earlier.

As per filings with the stock exchange, Dena Bank's Malabar Hill branch in Mumbai received bulk fixed deposits from various entities or government organisations between January 30, 2014 and May 5, 2014.

Subsequently, term deposits amounting to Rs.256.69 crore were pledged to the lender by the same signatories to obtain overdraft facilities of Rs. 223.25 crore (current outstanding at Rs.217.17 crore).

The funds were transferred out of the bank by allegedly creating fake overdraft facility, resulting in a fraud on the bank and the concerned entities and government organisations.

The bank has lodged a complaint in this regard with the CBI.

Dena Bank has made a provision of Rs. 54.29 crore during the quarter ended June 30, 2014 and the balance to be provided equally in subsequent three quarters of FY 2014-15.

Queried about the possible impact if the coal block allocations are cancelled by the Supreme Court, Mr Kumar said Dena Bank has lent to nine organisations in the sectors of steel and power.

The apex court had recently held that the coal block allocations made between 1993 and 2010 were illegal.

Meanwhile, the bank is targeting business growth of 18 per cent provided it gets additional equity of around Rs.1,200 crore. If the bank doesn't get the equity, then the target growth will be 11 per cent, he said.

According to Mr Kumar, the central government holds an around 58 per cent stake in the bank, and if it reduces it by 7 per cent, preferential issues could be made to raise the needed funds.

Mr Kumar further said that the bank plans to increase its credit-deposit ratio to 72:28 from the current 70:30.

Dena Bank plans to open 150-175 branches this year.