Public sector lender Punjab National Bank said on Saturday it has detected a fraud of more than Rs 3,800 crore by Bhushan Power & Steel Ltd and has reported it to the Reserve Bank of India .

PNB said BPSL misappropriated bank funds and manipulated its books of accounts to raise funds from consortium lender banks.

“On the basis of forensic audit investigation findings and CBI filing FIR, on suo moto basis, against the company and its directors, alleging diversion of funds from banking system, a fraud of Rs 3,805.15 crore is being reported by bank to RBI,” Punjab National Bank said in a regulatory filing.

“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks. At present, the case is at NCLT which is in advance stage and the Bank expects good recovery in the account,” PNB added.

PNB said its domestic exposure to BPSL stood at Rs 3,191.51 crore and overseas exposure of USD 49.71 million at the Dubai branch and USD 38.51 million at the Hong Kong branch.

The state-run bank has reported a new fraud at a time when it is recovering from a major financial embezzlement of around USD 2 billion by diamond merchant Nirav Modi that was reported in February 2018.