Terming whistleblower allegations on loan evergreening as “grossly inaccurate and baseless”, Indusind Bank on Saturday admitted to have disbursed 84,000 loans without customer consent in May owing to a “technical glitch”.
Lending without consent was reported by the field staff in two days, and the glitch was also rectified expeditiously, the private sector lender said in a clarification.
On Friday, there was a media report about anonymous whistleblowers writing to the bank management and the RBI about BFIL, the microlending-focused subsidiary of the bank, allegedly resorting to evergreening of loans, wherein existing borrowers unable to pay dues were given new loans to present the books as clean.
“The bank strongly denies the allegations of ‘evergreening’. 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,” an official statement said.
“Due to a technical glitch in May 2021, nearly 84,000 loans were disbursed without the customer consent getting recorded at the time of loan disbursement,” it added.
“Operational issues” due to the pandemic’s second wave like lockdowns, containment zones, and restrictions at the village/panchayat level had necessitated disbursement of some loans in cash, it said.
At the end of September, 26,073…