PNB said the company misappropriated bank funds and manipulated books to raise funds from consortium lenders.
"On the basis of Forensic Audit Investigation findings and the CBI filing an FIR on a suo moto basis, against the company and its directors, alleging diversion of funds from the banking system, a fraud of ₹3,805.15 core is being reported by the bank to the RBI," the bank said.
The state-owned bank also said that it has made provision of ₹1,932.47 crore against this account.
BPSL is one of the 12 accounts identified by the RBI for insolvency proceedings. JSW Steel has offered to pay ₹19,350 crore to financial creditors, which implies a haircut of around 60% for lenders.
The state-owned bank reported the fraud at a time when it is already recovering from the Nirav Modi scam, where it was defrauded of ₹11,400 crore.