Transstroy India denies fraud allegations: Do banks have proper checks in place?

The Hyderabad-based setup company named Transstroy India is now under the CBI scanner for allegations of fraud and including loans from a group of banks. The total has been massive. Though the entire limit authorized was Rs 4,765.70, but the share of Canara Bank was Rs 678.28 crore only as per the statement by Canara Bank the leader in the group with 13 other banks. On 10th February the account was said to be a scam and was reported to RBI other than its extent of state involvement.

All the misconduct has been denied by the company said Sridhar Cherukuri, the chairman and managing director and the CEO of Transstroy India. It has been said that there is no scam in the company and they couldn’t pay the amount because the government of Andhra Pradesh overnight summoned and encashed their bank assurances in the Polavarum Irrigation Project worth over Rs 900 crores and this is the major reason behind why the account became a Non-Performing asset. He said that there isn’t any scam and these are all accusations. There is a relation between Cherukuri and Rayapati Sambasiya Rao previously with Congress and now with Telegu Desam Party.

The case of Transstroy India has again put into focus the existing supplies said by those who have tracked the banking sector and loaning to the set-up sector and the level to which banks have suitable checks in place and questions that now arise. It will be wrong to conclude that all the scammers are troubled with dangers, but it is a no brainer that moneylenders have to to be training carefulness. Nonetheless then, do they? In the end, this is not the only company that came under CBI in recent years.

The company was relishing bounds from numerous banks under Numerous Funding Preparation from 2001 said in the note. Afterward, in 2013 a group with Canara Bank as a leader with 13 other banks was formed. On 10th February the account was then declared as a scam and reported to the Reserve Bank of India (RBI).
“The number of loans made by all the 14 grouping members is Rs 4,765.70 crore but the total scam amount in the press note was Rs 7,926.01 crore.” The outstanding amount was then borrowed under Multiple Banking Arrangement.”


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