PremiumMumbai: Bajaj Finance Ltd (BFL) remains in high vigilance mode and is constantly monitoring external market indicators like spread of infection and coverage of vaccination, the lender said in its FY21 annual report.
“Bajaj Finance calibrated its risk policies and underwriting standards to respond to the pandemic. It significantly tightened underwriting standards to ensure risk metrics and quality of the post-lockdown book is in line or better than that pre-covid-19 levels," the lender said.
This tightening, combined with a slowdown in demand, resulted in the assets under management not growing in line with earlier years, it said.
However, as economic recovery gained momentum from the second half, and early risk metric reached pre-covid-19 levels, the company said it gradually relaxed the tighter underwriting norms it had adopted. This led to new business volumes slowly reaching pre-covid-19 levels across most businesses.
“BFL carried out multiple risk simulations to assess the potential impact of the pandemic on its loan losses and provisions estimate and continued to absorb additional credit costs based on these simulations," it said.
The lender said it has deeply invested in its risk organization structure that includes dedicated credit risk units for each business vertical; business-specific units such as underwriting, risk containment and fraud control; and horizontal risk analytics, business intelligence and operational risk management units.
“The risk containment and fraud control unit is responsible for preventing frauds perpetrated by customers, sourcing channels and internal employees either alone or in connivance with others, through prevention and deterrence actions," it said.
According to the annual report, the company has enabled all its employees and agencies to flag any suspicious activity or transaction on the core lending system which would go through extensive checks by the fraud control unit. This unit is further supported by a dedicated business process outsourcing (BPO) and a 350-member field structure spread across 237 locations for faster response to frauds, it said.
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