Dena Bank on Wednesday clarified on reports of fixed deposit scam.

Commenting on the scam, the bank said, "Malabar Hill Branch received bulk term deposits from various entities and government organizations between January 30, 2014 and May 5, 2014.

Subsequently, term deposits amounting to Rs 2.57 billion were pledged to the bank by the same signatories to obtain overdraft facilities of Rs. 2.23 billion (present outstanding is Rs 2.17 billion). The funds were surreptitiously transferred out of the bank by creating fake overdraft facility, resulting in a fraud on the bank and the concerned entities and government organizations. The bank has lodged complaint in this regard with CBI.

Bank has made a provision of Rs. 542.9 million during the quarter ended Jun. 30, 2014 and the balance to be provided equally in subsequent three quarters of FY 2014-15.

An appropriate disclosure was made at point No. 6, in Notes to Accounts in the SEBI format containing unaudited reviewed financial results for the quarter ended Jun. 30, 2014. The SEBI format was submitted to NSE & BSE on Aug. 9, 2014 as per listing requirement.

Bank has suspended the erring branch manager and transferred the staff of the concerned branch."

Shares of the bank declined Rs 3.2, or 5.06%, to settle at Rs 60.10. The total volume of shares traded was 852,386 at the BSE (Wednesday).