The accounts of Reliance Home Finance and Reliance Commercial Finance have been declared a fraud by the Karnataka Bank with the combined loan outstanding worth more than Rs 160 crore to the lender.
Out of this, the major chunk of the outstanding loan amounting to Rs 138.41 crore is attributed to Reliance Commercial Finance, with whom Karnataka Bank has been dealing since 2014 onward.
On the other hand, Reliance Home Finance has loan worth Rs 21.94 crore to its name and around 24 lenders were a part of a multiple banking arrangement for the same. Similarly, 22 lenders were included in an arrangement of a similar kind with respect to Reliance Commercial Finance.
Karnataka Bank holds a share of about 0.39 per cent and 1.98 per cent in the multiple banking arrangements to Reliance Home Finance and Reliance Commercial Finance respectively. At the same time, provisions up to 100 per cent have been made by the bank in both these cases against the loans that have been provided to the companies.
“Both the accounts were classified as NPA (non-performing assets) and have been fully provided for. As such, there is no impact on the financials of the bank going forward,” Karnataka Bank’s statement was quoted in a report by the Economic Times.
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