FREE virtual training session on Passive Income Secrets: October 24 and 25, 2020, 10am to 1pm. Register Now!
you are here: HomeNewsBusiness
Last Updated : Jun 10, 2019 11:16 AM IST | Source: Moneycontrol.com

IL&FS may sue SBI, BoB, PNB, Yes & HDFC Bank over unauthorised withdrawals: Report

The nine banks allegedly made ‘unauthorised auto-deductions from IL&FS escrow accounts” between October last year and April

Infrastructure Leasing & Financial Services (IL&FS) will initiate contempt proceedings against nine banks -- State Bank of India (SBI), Bank of Baroda (BoB), HDFC Bank, Yes Bank, Punjab and Sind Bank, Punjab National Bank (PNB), Indian Bank and Indian Overseas Bank -- for unauthorised withdrawals of about Rs 800 crore, according to a report by The Economic Times.

The banks allegedly made 'unauthorised auto-deductions from IL&FS escrow accounts' between October last year and April to recover debt, the report stated. An order passed by the National Company Law Appellate Tribunal (NCLAT) last year had prohibited lenders from initiating recoveries.

“Unauthorised deductions affected cash flow and it is also likely to affect timelines, which is detrimental to overall resolution framework being followed by the board toward speedy resolution,” the article quoted a source as saying.


Deductions have been made from accounts linked to the Chenani Nashri tunnel highway in Kashmir and Jharkhand road projects, the report said. Auto debits have also been made from escrow accounts linked to the Hazaribagh Ranchi Expressway, Barwa Adda Expressway, Karyavattam sports facility, East Hyderabad Expressway and Baleshwar Kharagpur Expressway.

As per the report, SBI has withdrawn over Rs 100 crore; HDFC Bank and BoB Rs 90 crore; and Canara Bank, Union Bank of India, Allahabad Bank, Punjab & Sind Bank over Rs 100 crore.

The group will also seek a refund from the lenders, sources told the newspaper. Moneycontrol could not independently verify the story.

Also read: IL&FS' final audit complete, exposes web of corruption, shady loans

The IL&FS group has an outstanding debt of around Rs 91,000 crore. The group has classified its companies as green, amber, and red, according to their ability to meet their payment obligations. Around 55 companies are classified as green, 13 as amber and 82 are labelled red.
First Published on Jun 10, 2019 11:16 am