The shares of private lender IndusInd Bank fell 11 per cent during morning trade on Monday despite clarification from the bank on allegations by whistle-blowers of evergreening loans.
At 10:09 am, IndusInd Bank was trading at ₹1,060.60 on the BSE, down ₹128.15 or 10.78 per cent. It had opened at ₹1,125.00 as against the previous close of ₹1,188.75. It hit an intraday high of ₹1,126.95 and a low of ₹1,053.45.
IndusInd Bank says whistleblower claims baseless; gave 84k loans sans client consent in May
On the NSE, it was trading at ₹1,055.40, down ₹133.70 or 11.24 per cent.
IndusInd Bank has initiated an independent review of its microfinance arm Bharat Financial Inclusion Ltd (BFIL) to see if there was any process lapse or accounting failure after a complaint by a whistleblower.
Under fire, IndusInd Bank begins review of microfinance subsidiary
A media report on Friday stated that anonymous whistleblowers had written to the bank management and the RBI about BFIL, the microlending-focused subsidiary of the bank with allegations of evergreening of loans.
Corrective action if needed
The company had clarified that all the loan products managed by BFIL, which provides micro loans to women in rural India, in the capacity of a Business Correspondent, are approved by IndusInd Bank and are fully compliant with extant regulatory guidelines, issued from time to time.
However, it had said that its subsidiary had disbursed nearly 84,000 loans in May 2021 without customer consent due to a technical glitch, even as it denied allegations of ever-greening of loans.
It has initiated an independent review of BFIL.
“Should there be any need, the Bank will immediately take corrective action as appropriate and keep all the stakeholders adequately informed. The Bank has been following a conservative provisioning approach and reiterates that there is no change in the credit cost estimates including that in the micro-finance business,” IndusInd Bank said in a statement.