New Delhi, Dec 24 (IANS): State-run Punjab National Bank (PNB) is yet again in the news in connection with "fraud" after the former Maruti Suzuki Managing Director (MD) Jagdish Khattar was booked by the CBI in a Rs 110 crore alleged bank loan fraud case involving his new company Carnation Auto India Pvt Ltd.

Khattar on Tuesday, however, denied it was a fraud, and said it is a case of business failure.

The amount in question in Khattar's case is small compared to earlier frauds perpetrated on PNB where it has been duped of larger amounts.

The diamantaire duo of Nirav Modi and Mehul Choksi had earlier defrauded PNB of about Rs 14,000 crore via fake letters of credits and letters of undertaking.

When contacted, PNB refused to comment on the latest development.

In bid to revive flagging private investment and domestic entrepreneurship, Prime Minister Narendra Modi had recently said that business failure not a crime.

According to official sources here, in cases of loan default it needs to be proved that such default is not is a deliberate act.

In its FIR, the Central Bureau of Investigation (CBI) has named Khattar and his company Carnation Auto India Ltd for allegedly causing a loss of Rs 110 crore to PNB, CBI officials said.

Khattar, however, denied any wrongdoing and said a detailed audit found nothing amiss.

"Carnation is a bonafide business failure. There is no wrong doing. A detailed forensic audit was conducted earlier this year by a leading independent auditor and nothing amiss was found. The Bank has now referred it to CBI as a part of the process followed by them. Search was conducted by CBI but nothing incriminating was found. We will be vindicated once the investigation is completed," he said in a statement.

According to Reserve Bank of India (RBI) report on "Trend and Progress of Banking in India 2018-19 released on Tuesday, "public sector banks accounted for a bulk of frauds reported in 2018-19 - 55.4 per cent of the number of cases reported and 90.2 per cent of the amount involved - mainly reflecting the lack of adequate internal processes, people and systems to tackle operational risks."