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IndusInd Bank Shares Fall Over 12% Despite Refuting Claims Of "evergreening" Loans

The stocks of India's leading private sector lender, IndusInd Bank stumbled over 12% to hit a low of 1042.10 at the Bombay Stock Exchange.

IndusInd Bank

Image: ANI/PTI

Shares of the IndusInd Bank tumbled over 12% hitting a low at Rs 1,042.10 on the Bombay Stock Exchange (BSE) on Monday. Speaking on the same, the IndusInd Bank in a statement on Saturday admitted disbursing 84,000 loans without consumer consent due to some technical glitch in the month of May. Meanwhile, a group of whistleblowers earlier raised the issue of "evergreening" of loans from its MFL subsidiary, Bharat Financial Inclusion Limited (BFIL)  and further stated about the lapses in the governance in the accounting of loans since the COVID-19 pandemic. However, refuting such allegations made by the whistleblower, IndusInd has termed these as "inaccurate and baseless."

IndusInd Bank in a statement informed that all the loans managed by BFIL in the capacity of a business correspondent are approved by the bank and are fully compliant with the guidelines issued from time to time. Apart from that, it also informed that all the processes pass through audit inspection and risk checks and is further fully automatic with regulatory norms as applicable at all the positions. 

Further clarifying regarding the issuing of loans, it said that a technical glitch resulted in the disbursement of 84,000 loans without customer consent in May 2021. Terming "Operational issues" due to the pandemic's second wave like lockdowns, containment zones, and restrictions at the village/panchayat level, disbursement of some loans in cash was necessary, the bank stated. 

At the end of September, 26,073 of these 84,000 clients were active with the loan outstanding at Rs 34 crore, which is 0.12 per cent of the September-end portfolio, the bank said, adding that it carries necessary provisions against the loans.

Stocks of IndusInd Bank falls over 12%

Meanwhile, the stocks of India's leading private sector lender stumbled over 12% to hit a low of 1042.10 at the Bombay Stock Exchange. Furthermore, at the National Stock Exchange, it tumbled by 12.40% hitting Rs 1041.60. 

Later at 11:42 AM, the shares were settled at Rs 1064.50 at the BSE and Rs 1063.95 at the NSE. 

Meanwhile, communication from the whistleblowers to the bank's chief executive Sumant Kathpalia, independent directors, and RBI officials had happened between October 17 and October 24. Additionally, there was also an "outsider" who had written to RBI on October 14, the bank stated.

Image: ANI/PTI

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