Tag: bharat financial inclusion ltd

IndusInd Bank: Shalabh Saxena, Ashish Damani yet to resign from BFIL to join Spandana Sphoorty

Banking & Finance

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IndusInd Bank on Tuesday said Shalabh Saxena, the Managing Director and CEO of Bharat Financial Inclusion Ltd, and Ashish Damani, Executive Director & Chief Financial Officer of BFIL, are yet to resign and as per their terms of contract, they are prohibited from accepting employment at a competitor of the microfinance company.

Further, they cannot be relieved from the services of the company until an ongoing review into the disbursal of nearly 84,000 loans without customer consent due to a technical glitch at BFIL is completed.

Under fire, IndusInd Bank begins review of microfinance subsidiary

“…the continued employment of Shalabh Saxena and Ashish Damani at BFIL is critical to the closure of such process. Accordingly, they cannot be relieved from the services of BFIL, until completion of the said review,” IndusInd Bank said in a stock exchange filing.

BFIL is a wholly-owned subsidiary of IndusInd Bank.

Clarification

“Neither Shalabh Saxena nor Ashish Damani have tendered their resignation from the services of BFIL. As per the terms of their employment, once the resignation is tendered, it is subject to acceptance by the Board of Directors of BFIL (Board). Upon acceptance by the board, a specified notice period is also required to be served. However, as neither of them have tendered their resignations to BFIL, such due process has not been initiated,” it further said.

IndusInd Bank’s ‘technical glitch’: RBI examining portfolio as part of an ongoing audit

Its clarification comes a day after Spandana Sphoorty (SSFL) announced the appointment of Saxena as its new Managing Director and CEO and Damani as the President and Chief Financial Officer.

“Both Saxena and Damani will join Spandana soon,” it had said.

IndusInd Bank further said that as per their contractual terms of employment Saxena and Damani are also prohibited from accepting employment at a competitor of BFIL (such as SSFL), unless approved in writing by the Board of BFIL.

“As stated above, as resignation from BFIL has not been tendered to the board by Shalabh Saxena and/or Ashish Damani, any purported acceptance by them of employment at SSFL will be in contravention of the terms of their employment with BFIL,” it said.

BFIL and IndusInd Bank are in the process of evaluating and undertaking appropriate steps and actions, including strengthening the management of BFIL to continue its usual business operations under the able guidance of its management and the bank, the lender said.

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IndusInd Bank’s ‘technical glitch’: RBI examining portfolio as part of an ongoing audit

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The Reserve Bank of India (RBI) is already examining issues around the technical glitch at IndusInd Bank’s subsidiary that led to 84,000 loans being disbursed without the customers’ consent. The lender will also undertake an external audit of the issue if required.

This was informed by IndusInd Bank’s Managing Director and CEO, Sumant Kathpalia, at an analyst call on November 6. He also denied allegations of evergreening of loans and stressed that there is strong risk management and a control framework in place – both within the bank and its microfinance subsidiary Bharat Financial Inclusion Ltd (BFIL).

“Yes, it is part of the annual review process which happens and it is already going on and they (RBI) are reviewing this portfolio,” Kathpalia said in response to a query on whether this issue would be a part of the risk-based supervision audit that is conducted by the RBI. “The whistleblower complaint was marked to the RBI also and the bank has kept the regulator abreast on its internal review process,” he further said.

Internal review

Meanwhile, responding to another query, Kathpalia said the bank will appoint an external auditor to validate the results of the internal review.

Also read: IndusInd Bank shares slump 11 per cent following loan evergreening issue

“We will have the review process completed. We will have a committee which will include external participants and an external auditor validating the results, and will have an independent process to give comfort to the investors that everything is right in BFIL. We will not be happy only with the internal audit,” he said.

In the call, Kathpalia also said the bank has a strong succession plan for BFIL in place in case its top management leaves. Non-executive Vice Chairman of BFIL, MR Rao, had stepped down in September but Kathpalia said he continues to work as an advisor with IndusInd Bank.

‘Unlisted company’

While analysts expressed surprise that this was not informed to the stock exchanges, Kathpalia maintained that BFIL is an unlisted company. “There was an agreement that he will retire in March 2021 and we had honoured that… he was also very upset on the 84,000 loans. We have taken action against certain persons,” he said.

Also read: Under fire, IndusInd Bank begins review of microfinance subsidiary

Trying to assuage concerns, he also said that the bank has been following a conservative provisioning approach.

“IndusInd Bank could have done better in terms of communicating about the management changes in BFIL and a technical glitch in the microfinance book, which led to allegations of evergreening in the MFI book (which otherwise has always been an area of suspicion). We believe that the bank’s turnaround story remains intact but it needs to work more on strengthening credit underwriting/risk management, and communication with the stakeholders to sustain the long-term rerating,” said Emkay Global Financial Services in a note on Monday.

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IndusInd Bank’s net profit doubles to Rs 1,016 cr in Jun quarter, BFSI News, ET BFSI

Banking & Finance

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New Delhi, Jul 27 () Private sector lender IndusInd Bank on Tuesday reported doubling of its consolidated net profit to Rs 1,016.11 crore in the June 2021 quarter, aided by healthy growth in retail loans and lower NPA provisioning. The bank had posted a net profit of Rs 510.39 crore in the corresponding quarter of the previous financial year.

Its total income during April-June 2021 rose to Rs 9,362.76 crore from Rs 8,682.17 crore in the year-ago period, according to a regulatory filing by IndusInd Bank.

Interest income was up at Rs 7,574.70 crore, against Rs 7,161.73 crore a year ago.

Income from retail banking rose nearly 22 per cent to Rs 5,685.53 crore in the June 2021 quarter, from Rs 4,674.06 crore in the year-ago quarter.

The bank’s asset quality showed little impairment on a gross level, as the non-performing assets (NPAs) rose slightly to 2.88 per cent of the gross advances as of June 2021, as against 2.53 per cent by the year-ago period.

Net NPAs or bad loans, however, came down to 0.84 per cent from 0.86 per cent a year ago.

Provisioning for bad loans and contingencies for the reported quarter came down to Rs 1,844.02 crore, from the Rs 2,258.88 crore parked aside for same quarter of 2020-21.

The bank’s consolidated financial statement comprises statements of IndusInd Bank, Bharat Financial Inclusion Ltd (fully owned subsidiary), and IndusInd Marketing and Financial Services Pvt Ltd (associate company).

On a standalone basis, the lender’s net profit jumped over two times to Rs 974.95 crore in the June 2021 quarter, compared with Rs 460.64 crore in the year-ago period.

Income rose to Rs 9,355.77 crore, from Rs 8,680.92 crore a year ago, the bank said.

The bank’s shares on Tuesday closed 0.58 per cent lower at Rs 975.65 apiece on the BSE. KPM HRS hrs



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