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Private sector Karnataka Bank has declared accounts of Reliance Home Finance and Reliance Commercial Finance a fraud with combined loan of out-standings of over Rs 160 crore to the lender.
The bank has reported to the Federal Reserve Bank regarding frauds within the credit facilities extended earlier to 2 listed companies — Reliance Home Finance with loan outstanding of Rs 21.94 crore and Reliance Commercial Finance Rs 138.41 crore as fraud, Karnataka Bank said during a regulatory filing.
The lender said it’s been handling Reliance Home Finance since 2015 and with Reliance Commercial Finance since 2014.
With reference to loan to Reliance Home Finance, as many as 24 lenders were a part of a multiple banking arrangement, while just in case of Reliance Commercial Finance as many as 22 lenders were a part of the loan arrangement.
Karnataka Bank said its share within the multiple banking arrangement to Reliance Home Finance is 0.39 per cent and thereto of Reliance Commercial Finance is 1.98 per cent.
The lender said it’s made provision up to 100 per cent in both the cases against the loan given to the businesses.
“Both the accounts were classified as NPA (non-performing assets) and are fully provided for. As such, there’s no impact on the financials of the bank going forward,” Karnataka Bank said.