BoB, Allahabad Bank, IOB sink up to 7% on Rotomac 'default'

Investor patience was put to test on Monday after Bank of Baroda tumbled over 5 per cent on news that the public lender has filed a complaint against Rotomac Pen promoter Vikram Kothari for a loan default of Rs 800 crore.

CBI has registered an FIR against Kothari, according to media reports.

The Kanpur-based company’s owner had taken a loan of more than Rs 800 crore from over five state-owned banks.


Allahabad Bank, Bank of India (BoI), Bank of Baroda, Indian Overseas Bank (IOB) and Union Bank of India compromised their rules to sanction loans to Rotomac, according to a PTI report on February 18.

Bank of Baroda was ended 5.48 per cent down at Rs 144.05on BSE. Allahabad Bank was down 6.30 per cent at Rs 51.30.

IOB, Union Bank and BoI declined up to 7.19 per cent.

Rotomac was declared a wilful defaulter, courtesy an order dated February 27, 2017, passed by an authorised committee as per procedures laid down by the Reserve Bank of India.

The development comes less than a week after the Rs 11,400 crore PNB scam came to light, in which billionaire Nirav Modi allegedly secured fraudulent letters of undertaking (LoUs) from a branch in Mumbai to get overseas credit from other Indian lenders.