CBI registers case against Pune-based firms on Andhra Bank's complaint

The Central Bureau of Investigation has registered a First Information Report upon a complaint filed by Andhra Bank against city-based firms Nipko Engineering Services and M/s Signet Products. The bank has accused the two firms of submitting fake bills for 'discounting' and causing it a loss of Rs. 73 crore between August 2017 to October 2017, a CBI release said on Wednesday. The public sector bank, in its complaint, also asked the agency to look into the role of its own employees in the case.

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Faking bills for discounting

The two firms are engaged in supply, service and maintenance of electrical, electronic equipment. They opened a current account with Andhra Bank with its Andheri branch in Mumbai in July 2016. "The two companies are not enjoying any type of sanctioned credit limits with the branch. The companies had been submitting 'Usance bills' to the branch for discounting," the complaint said.

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The branch discounted these bills in spite of the fact that the companies did not have any sanctioned credit limits, it said. The bills were discounted beyond the discretionary powers of the branch head. In discounting of usance bills, the bank pays the amount of the bill to the drawer in advance. They become due on a specified date from the date of the drawing, after which sales proceeds are realised from the drawee (the buyer).

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"If two parties are entering into a sale-purchase transaction, the purchaser does not pay to the seller party immediately for the goods he had purchased. He presents his bills to the bank and the bank makes the payment. This is called bill discounting," a CBI official said.

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Fraud and loss

In the present case, fake bills were submitted by the two firms as there were no sale-purchase transactions in reality. The firms pocketed the funds by defrauding the bills, causing a loss to Andhra Bank, he said. A case under IPC sections 467 (forgery), 420 (cheating) was registered and the Central agency is conducting further probe, he said.