Shares Of IndusInd Bank

After Clarification On Allegations Of Whistleblowers, The Shares Of IndusInd Bank Climb Down Over 12%

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IndusInd Bank rubbished whistleblower allegations as inaccurate and baseless but later owned up to having disbursed 84,000 loans without the consent of its customers by saying it was a ‘technical glitch’.

On November 8, the shares of Indusind Bank fell over 12℅ after the lender owned up to a technical glitch and said that it expended 84,000 loans without the consent of customers. On the BSE (Bombay Stock Exchange), the stocks climbed down to 12.33℅ to Rs 1042.10. At the National Stock Exchange, it climbed down to 12.40℅ to Rs 1,041.60.

Owning Up To Allegations

IndusInd Bank rubbished whistleblower allegations as inaccurate and baseless but later owned up to having disbursed 84,000 loans without the consent of its customers by saying it was a ‘technical glitch’.

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Reports

The field staff reported the lending without consent incident in two days and the glitch was corrected and rectified quickly, the private sector lender clarified. 

On 5th November, there surfaced media reports about anonymous whistleblowers addressing the bank management and the RBI about BFIL, the subsidiary of the bank focused on microlending. It accused the BFIL of evergreening of loans and that the borrowers who couldn’t pay dues were granted new loans to make the books look clean.

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Official Statement by IndusInd Bank

According to an Official Statement, the bank completely denies the allegations of evergreening. It further said that the loans originating and managed by BFIL fully comply with the regulatory guidelines. It added that 84000 loans were disbursed due to a glitch in May 2021 and that it was without customer consent also. 

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In September end, 26,073 out of these 84000 clients were active with an outstanding loan of Rs 34 crore which is approx. 0.12℅ of the portfolio of September end. 

They have also issued a statement saying that the Standard Operating Procedure has been revised since then to make Biometric Authorization a compulsion and that in October of 2021, around 100% of the disbursements of the loan were in the customers’ bank account as of Pre Covid time.

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