CanFin Homes, the housing finance arm of public lender Canara Bank, on Tuesday, July 25, said three of its employees at the Ambala branch have committed fraud of Rs 38.53 crore, and an FIR has been lodged with the Haryana Police.
Suresh Srinivasan Iyer, the Managing Director (MD) and Chief Executive Officer (CEO) at CanFin Homes on Thursday said that the company will eliminate cheque signing power and centralise signing process. Iyer was speaking exclusively to CNBC-TV18 a day after the CanFin Homes reported a fraud at its Ambala branch.
“We have filed a case with the police and people involved have been arrested,” he told CNBC-TV18.
However, Iyer stressed that the Ambala branch fraud doesn’t impact the asset side of the balance sheet and no loans are at risk.
Calling it as an isolated case, the firms’ CEO said that centralisation of disbursements and CMS is now being placed in the system. He added that the company has done the forensic audit and funds, collections and disbursements have been pooled in sweep in sweep out accounts.
The sweep in/sweep out deposit facility ensures that the funds are safe, liquid and readily available for any urgent financial needs at zero cost. This type of deposit account is most suitable for individuals and corporates who are getting continuous float in current or savings accounts.
Reportedly, this fraud is the second instance as reported by the company in recent months. In May 2022, the company detected 37 loan accounts with fake income tax returns.
Shares of CanFin Home opened lower at Rs 804.95 apiece on the Bombay Stock Exchange (BSE) on Thursday. At the time of writing this report, the shares were trading over 6 percent lower at Rs 796.85 apiece on the BSE.