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Home / Industry / Banking /  Govt took less time to detect, take action in ABG Shipyard fraud case: FM Sitharaman
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Union Finance Minister Nirmala Sitharaman on Monday said that the PM Modo-led NDA government has taken less time to detect the ABG Shipyard fraud cases. She said that loan to the ABG Shipyard account turned NPA during the erstwhile UPA regime and the banks took lesser than normal time to detect the fraud perpetrated by the shipping firm.

"...in this particular case with that kind of a measurement, actually, I should say to the credit to the banks, they've taken lesser than what is normally an average time to detect these kinds of frauds," Sitharaman said at a press conference after addressing the members of the RBI Central board.

Sitharaman also said that during the NDA regime, health of banks has improved and they are in position to raise funds from the market. The Finance Minister also said that the Central Bank and Government of India are on board on the cryptocurrency issue.

"With RBI and Ministry, not just on crypto but on every other thing as well, I think there's complete harmony with which we're working, respecting each other's domain also knowing what we have to do with each other's priorities and in the interest of the nation. There's no turfing here," she said.

Last week the Central Bureau of Investigation (CBI) booked ABG Shipyard Ltd and its then Chairman and Managing Director Rishi Kamlesh Agarwal along with others for allegedly cheating a consortium of banks led by State Bank of India of over 22,842 crore. 

The bank had first filed a complaint on November 8, 2019, on which the CBI had sought some clarifications on March 12, 2020. The bank filed a fresh complaint in August that year. After "scrutinising" for over one and a half-year, the CBI acted on the complaint filing an FIR on February 7, 2022.

According to the Livemint report, SBI said that ABG Shipyard had banking arrangements since 2001. It was financed under a consortium arrangement by over two dozen lenders with private lender ICICI Bank as the lead. Due to poor performance, the account turned non-performing on 30 November 2013 and several efforts were made to revive the company. The account was then restructured under the corporate debt restructuring mechanism in March 2014 by all lenders, which also did not take off.

As the restructuring failed, the account was classified as a non-performing asset in July 2016 with backdated effect from 30 November 2013. E&Y was appointed the forensic auditor by lenders during April 2018 and submitted its report on 19 January," it said. SBI said that the E&Y report was placed before the Fraud Identification Committee of 18 lenders in 2019.

The company was sanctioned credit facilities from 28 banks and financial institutions with the SBI having exposure of 2468.51 crore, CBI officials said.

The Forensic Audit has shown that between 2012-17, the accused colluded together and committed illegal activities including diversion of funds, misappropriation, and criminal breach of trust.

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