PNB reports fraud of Rs 2,060 crore in IL&FS Tamil Nadu Power NPA account

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Punjab National Bank (PNB), on March 15, reported a fraud of Rs 2,060 crore in the NPA account of IL&FS Tamil Nadu Power Company Limited (ITPCL).

The bank informed it has already made provisions amounting to Rs 824.1 crore as per prescribed prudential norms.

PNB said in a regulatory filing: “A fraud of Rs. 2060.14 crore is being reported by Bank to RBI in the accounts of the Company. Bank has already made provisions amounting to Rs 824.06 Crore, as per prescribed prudential norms.”

Exactly a month ago, in February, Punjab & Sind Bank had declared IL&FS Tamil Nadu a fraud account with outstanding dues of Rs 148 crore. "It is informed that an NPA account, viz IL&FS Tamil Nadu Power Company Ltd with outstanding dues of Rs 148.86 crore has been declared as fraud and reported to RBI today as per regulatory requirement," the lender said in a regulatory filing.

The company was set up as a special purpose vehicle (SPV) by the debt-laden Infrastructure Leasing & Financial Services Ltd (IL&FS) under its energy platform IEDCL for implementation of thermal power projects at Cuddalore in Tamil Nadu.

As of April 2020, ITPCL owed over Rs 6,700 crore to its lenders and around Rs 900 crore to IL&FS Group entities, according to the affidavit submitted by IL&FS before the National Company Law Appellate Tribunal (NCLAT). IL&FS had earlier initiated the restructuring of ITPCL, which also included selling its stake to the Tamil Nadu government and other stakeholders, but it was unsuccessful.