Indusind Bank shares tumble over 12% after clarification on whistleblower allegations
Indusind Bank on November 6 admitted to have disbursed 84,000 loans without customer consent in May owing to a “technical glitch”
Shares of Indusind Bank on November 8 tumbled over 12% after the lender said it disbursed 84,000 loans without customer consent in May owing to a "technical glitch".
The stock tanked 12.33% to ₹1,042.10 on the Bombay Stock Exchange.
At the NSE, it tumbled 12.40% to ₹1,041.60.
Terming whistleblower allegations on loan evergreening as "grossly inaccurate and baseless", Indusind Bank on November 6 admitted to have disbursed 84,000 loans without customer consent in May owing to a "technical glitch".
Lending without the consent was reported by the field staff in two days, and the glitch was also rectified expeditiously, the private sector lender said in a clarification.
On November 5, there was a media report about anonymous whistleblowers writing to the bank management and the RBI about BFIL, the microlending-focused subsidiary of the bank, allegedly resorting to evergreening of loans, wherein existing borrowers unable to pay dues were given new loans to present the books as clean.
"The bank strongly denies the allegations of evergreening. All the loans originated and managed by BFIL, including during the COVID period which saw the first and second waves ravaging the countryside, are fully compliant with the regulatory guidelines," an official statement said.
"Due to a technical glitch in May 2021, nearly 84,000 loans were disbursed without the customer consent getting recorded at the time of loan disbursement," it added.
"Operational issues" due to the pandemic’s second wave like lockdowns, containment zones, and restrictions at the village/panchayat level had necessitated disbursement of some loans in cash, it said.
At the end of September, 26,073 of these 84,000 clients were active with the loan outstanding at ₹34 crores, which is 0.12% of the September-end portfolio, the bank said, adding that it carries necessary provisions against the loans.
It also said that the Standard Operating Procedure has since been revised to make biometric authorization compulsory, and that in October 2021, nearly 100% of the loan disbursements were in the bank accounts of the customers, as in pre-COVID time.
Source: Read Full Article
