Indostar finds irregularities in commercial vehicle loan portfolio
According to the non-bank lender, preliminary findings showed deviations from company’s credit policy in loan approvals to existing customers, in waivers in foreclosure cases, deviation in due process in recast loans. The review is expected to be completed with finalisation of audited financial statements for FY22
“The Audit Committee, in its meeting held on 31 March 2022, was informed by the management of the Company that certain observations and control deficiencies were observed during the course of the interim statutory audit of the annual financial statements of the Company specifically in the commercial vehicle loan segment as part of the review of Company's loan portfolio, including a review of the policies and procedures," said the company. “It further appears that such aspects were primarily concerned with a part of the CV Loan Portfolio and may have arisen pursuant to liquidity concerns with customers caused by the onset of the COVID-19 pandemic
Indostar warned that the company's capital adequacy ratio could fall to approx 25% from 35.1% as of 31 Dec 2021 at the higher end of potential additional loan provisioning.
“While the Potential Additional Provisioning is expected to impact the Company's net-worth and capital adequacy ratio, the Company is expected to continue to be adequately capitalized, will be in compliance with capital adequacy norms and have sufficient liquidity to satisfy its short-term and longterm liabilities," it said.
