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MUMBAI: State-run lender Punjab National Bank on Saturday declared loan exposure of Rs 3805 crore to bankrupt Bhushan Power and Steel as fraudulent. In a notice to exchanges PNB said it had reported the fraud to the Reserve Bank of India on the basis of forensic audit findings.“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. 3805.15 core is being reported by Bank to RBI,” Punjab National Bank said.The Rs 3805 crore includes domestic exposure of Rs 3191.5 crore at the lender’s Chandigarh Large Corporate branch, overseas exposure of Rs 345.74 crore at its Dubai branch and Rs.267.90 crore disbursed from its Hong Kong operations. The bank has already made provisions of Rs.1932.47 crore towards this exposure, it said.“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks,” PNB said. “At present, the case is at NCLT which is in advance stage and the Bank expects good recovery in the account.”