IndusInd Bank on November 6 admitted that it disbursed 84,000 loans without the consent of customers in May due to a “technical glitch”.
IndusInd Bank shares fell over 12% on November 8 after the lender said 84,000 loans disbursed without customers’ consent Due to a “technical glitch” in May.
The stock fell 12.33% to ₹1,042.10 on the Bombay Stock Exchange.
On NSE, it fell 12.40% to Rs 1,041.60.
IndusInd Bank on November 6 accepted the whistleblower’s allegations on Loan Evergreen as “extremely false and baseless” that 84,000 loans were disbursed in May due to “technical glitches” without the consent of customers.
The private sector lender said in a clarification, lending without consent was reported by field staff in two days, and the glitch was also rectified expeditiously.
On 5 November, there was a media report about unidentified whistleblowers writing to the bank management and the RBI about BFIL, the bank’s microlending-focused subsidiary, allegedly resorting to perpetuity of loans. , wherein new loans were given to existing borrowers unable to pay the dues. To present the books as clean.
An official statement said, “The bank strongly denies the allegations of Evergreen. All loans generated and managed by BFIL, which saw first and second waves in rural areas during the COVID period, are fully Comply with regulatory guidelines.”
It said, “Due to a technical glitch in May 2021, around 84,000 loans were booked at the time of loan disbursement without the consent of the customers.”
It said that due to “operational issues” caused by the second wave of the pandemic such as lockdown, restrictions at containment zones and village/panchayat level, it was necessary to pay some loans in cash.
At the end of September, 26,073 of these 84,000 customers were active with outstanding loans at ₹34 crore, which is 0.12% of the portfolio at the end of September, the bank said, adding that it makes necessary provisions against the loans.
It also said that the standard operating procedure has been modified to make biometric authorization mandatory, and in October 2021, almost 100% of loan disbursement was in customers’ bank accounts, as in pre-COVID times. .
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