MUMBAI: IndusInd Bank has said that there will be an independent review of the processes and accounting systems in its microfinance arm Bharat Financial (BFIL).
The announcement comes even as some analysts are unconvinced with the bank’s explanation that a ‘technical glitch’ resulted in 84,000 loans being disbursed. The analysts are awaiting clarifications as many had a positive outlook on the bank.
On Friday, The Economic Times reported that, acting as whistle-blowers, senior executives in the bank had alerted the RBI about ever-greening of loans in the bank’s microfinance arm BFIL.
On Saturday, the bank issued a statement “strongly denying” any ever-greening of loan accounts. “All the loans originated and managed by BFIL, including during the Covid period which saw the first and second waves ravaging the countryside, are fully compliant with the regulatory guidelines,” the bank had said.
However, the bank said that due to a technical glitch in May this year, nearly 84,000 loans were disbursed without the customer consent getting recorded at the time of disbursement.
“This issue was highlighted by the field staff within two days and the technical glitch was rectified expeditiously. Out of the above, only 26,073 clients were active with the loan outstanding at Rs 34 crore, which is 0.12% of the September-end portfolio,” the statement said.
It added that the standard operating procedure has been revised to make biometric authorisation compulsory.
