Buy This Chemical Stock For 30% Return: Recommended By IIFL Securities

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Company’s performance

According to the brokerage, DNL’s Basic Chemicals (BC) segment surprised, with a further sharp improvement in margins (up +530bps QoQ) to 34%. The company took advantage of the positive price trend across certain products. Demand for Fine & Speciality Chemicals continues to be strong.

“The company is in the advanced stages of doubling the IPA plant capacity and also improving on the power utility costs (via a captive power plant). Management expects these projects to contribute from 3QFY22” IIFL Securities has said.

“In terms of new CAPEX, the company has announced a plan to invest Rs7bn into downstream products of phenol and acetone, namely new import-substitute solvents. DNL will invest Rs3bn in new chemistries like fluorination in order to expand specialty product lines” described by the brokerage.

IIFL Securities has also claimed that “DNL aims to select only those products in which the company could be among the top-3 global suppliers for the next 10- 15 years. The key focus areas in terms of end-use segments would be solvents, life science chemicals, and dyes & pigments.” The brokerage has further clarified in its research report that “Apart from growth projects, DNL is setting up a premium high-tech R&D center. The company will make higher investments in R&D initiatives and launch new products in coming years.”

Financial summary of DNL according to IIFL Securities

Financial summary of DNL according to IIFL Securities

Consolidated (Rs mn) Revenue EBITDA Margin (%) EPS EPS growth (%) P/E (x) RoE (%) RoCE (%)
FY22E 59,945 25.8 72.3 27.2 29.1 35.3 40.4
FY23E 66,404 26.1 84.1 16.2 25.1 30.4 36.4

Disclaimer

Disclaimer

The above stock is picked from the brokerage report of IIFL Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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Five world market themes for the week ahead, BFSI News, ET BFSI

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The highest-ranking members of the Chinese Communist Party will gather in the coming days and are set to green-light another term for President Xi Jinping.

US inflation numbers may test the Federal Reserve’s view of price pressures as transitory, while trade data and more Q3 company earnings will show whether supply-chain glitches are waning.

PARTY TIME
A gathering of China‘s Communist Party in Beijing is expected to pass a historical resolution laying the foundation for President Xi to serve an unprecedented third term.

The first such resolution, in 1945, set the stage for Mao Zedong to become paramount leader while the second, in 1981, laid the groundwork for Deng Xioaping’s reform era.

This one may signal that Xi’s path is the one ahead, leading to “common prosperity” and away from growth at all costs. Unlikely to be mentioned is the precarity of the moment, with China’s growth engines sputtering and credit markets crumbling just as global monetary policy is in flux — caveat emptor.

PRICE GAUGING
The US consumer price index out on Wednesday, is forecast to have climbed 0.5 per cent in October after a 0.4 per cent rise in September as Americans paid more for food, rent and other goods.

Whether the current rise in prices is fleeting, stemming from temporary effects as the economy emerges from the pandemic, or signals the start a new upward trend, remains to be seen.

The Federal Reserve’s latest meeting held to the belief that high inflation would prove “transitory” though it acknowledged that global supply difficulties add to inflation risks.

It has managed to unveil a tapering of monthly bond buys without triggering a market “tantrum.” A strong inflation print that renews rate-hike talk could change that.

TRADE CROSSROADS
Accommodative policies in the developed world have fuelled huge demand for consumer goods, driving this year’s trade rebound. Exports from emerging economies, from raw materials to semiconductors, have surged. Shortages and price rises have ensued.

But trade may now be at a crossroads. Economists predict post-COVID normality will allow Western consumers to spend less on goods and more on travel and dining out. That could allow inventories to rise and cool the goods trade in early-2022.

Data on Sunday will show whether Chinese power shortages slowed exports and if a cooling economy is hurting imports.

A US export slump has blown its trade deficit to record highs, so Tuesday’s German data will be watched after August export volumes fell for the first time in 15 months. Finally, Monday may show semiconductor powerhouse Taiwan posting a 16th month of export growth.

BEAT GOES ON
European blue-chips reporting next week include financials Allianz, Aviva and Zurich Insurance, drugmakers Merck and AstraZeneca and steelmaker Arcelor Mittal.

European stocks have never been higher and the latest slew of earnings could prove a catalyst for fresh peaks. Expectations for Q3 profit growth have surged to 57.2 per cent year-on-year from 47.6 per cent two weeks ago; so far almost 66 per cent of companies have beaten expectations.

The fear of missing out on the post COVID-19 recovery and negative “real” bond yields help explain stock markets’ resilience. But how long can the party last? After all, the pent-up profit recovery from the COVID-19 2020 recession is expected to slow in 2022.

HIKES ON OR OFF?
World markets are often shaken up by investors switching between risk-on or risk-off. To mix things up, sentiment these days is being driven by a hikes on/hikes off mindset.

One day, it’s about major central banks hiking rates soon (sell bonds, buy bank stocks) and the next, it’s about them putting off tightening for as long as possible (buy bonds, send stocks to new record highs).

The latter view currently dominates after the biggest central banks pushed back by keeping policy unchanged.

But uncertainty over the rates outlook remains high. And that means the swing between ‘hikes on’ and ‘hikes off’ days could become the norm. Brace for more volatility.



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Analysts bullish on SBI counter after strong Q2 earnings performance, BFSI News, ET BFSI

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MUMBAI: Analysts are showering price target upgrades on the counter of State Bank of India after the state-owned lender’s strong earnings performance for the quarter ended September.

Analysts have raised their price target on the stock by 5-23 per cent following the results announcement on November 3, while most of them also retained their “buy” calls on the scrip.

“SBI is still trading at temptingly low valuations and remains well positioned as a recovery play,” said brokerage firm Edelweiss Securities in a note.

SBI reported better-than-expected net profit, net interest income and asset quality for the reported quarter. The lender’s gross non-performing assets ratio eased to 4.9 per cent from 5.32 per cent in the previous quarter.

Incremental stress on the loan book also declined as slippages in SMA-1 and SMA-2 category shrank 40 per cent sequentially to Rs. 6,690 crore reflecting the improving health of the balance sheet. Analysts said that the lender is exiting the second wave of the pandemic with a stronger balance sheet that has set the stage for growth in the coming years.

Shares of SBI have risen 143 per cent over the past 12 months making it one of the best performing banking stocks on the Street. Much of those gains are on the assumption that lender will be a major beneficiary of the improvement in private capital expenditure going ahead and its own improving asset quality.

“From here on, loan growth will be the key driver of PPOP growth. We remain optimistic on the long term drivers driving profitability,” said brokerage firm Nomura India in a note.

While brokerage firm Edelweiss Securities suggested that SBI has set itself up for more rerating in valuation multiples with its Q2 earnings, much of that rerating will depend on how expectations on loan growth turn out.

For the reported quarter, the lender reported little over 6 per cent year-on-year growth in loans with retail and home loans providing for much of the growth. At the same time, the corporate loan book shrank nearly 4 per cent indicating that the corporate capex cycle was still some way away.

“We see risk-on gaining momentum and potential dwindling of social costs. A discount to private peers is nevertheless warranted on account of lower credit cost elasticity (low provisioning) and structural limitations,” said Edelweiss Securities.



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DCB Bank Modifies Interest Rates On FD: Latest Rates Here

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Investment

oi-Vipul Das

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Along with competitive interest rates, DCB Bank provides a variety of benefits to both regular and senior citizens on fixed deposits, including flexible interest payment options, 0.5 percent p.a. additional interest for senior citizens, flexible tenure ranging from 7 days to 10 years, a minimum deposit amount of Rs 10,000, multiple interest payout options on a monthly, quarterly, half-yearly, or annual basis, an overdraft facility and so on. The bank has recently revised its interest rates on fixed deposits which is a must to know for you if you want to open an FD account.

DCB Bank Modifies Interest Rates On FD: Latest Rates Here

DCB Bank FD Rates For Regular Customers

DCB Bank revised its fixed deposit interest rates on November 2, 2021, and now offers an interest rate of 4.35 percent for FDs with maturities ranging from 7 to 90 days, 5.05 percent for deposits maturing in 91 days to less than 6 months, 5.45 percent for deposits maturing in 6 months to less than 12 months, and 5.55 percent for deposits maturing in 12 months. DCB Bank is currently offering an interest rate of 5.30 percent for deposits maturing in more than 12 months but less than 15 months, 5.50 percent for deposits maturing in 15 months but less than 700 days, and 5.95 percent for deposits maturing in 700 days. The bank is providing a 5.50 percent interest rate on deposits maturing in more than 700 days to less than 36 months and a 5.95 percent interest rate on deposits maturing in 36 months to less than 120 months to the general public. DCB Bank is currently giving the following interest rates to the general public for a single deposit of less than Rs.2 crore.

Tenure Interest rate per annum Effective Annualised Yield (% per annum)
7 days to 14 days 4.35% 4.35%
15 days to 45 days 4.35% 4.35%
46 days to 90 days 4.35% 4.35%
91 days to less than 6 months 5.05% 5.05%
6 months to less than 12 months 5.45% 5.56%
12 months 5.55% 5.67%
More than 12 months to less than 15 months 5.30% 5.41%
15 months to less than 18 months 5.50% 5.65%
18 months to less than 700 days 5.50% 5.73%
700 days 5.95% 6.22%
More than 700 days to less than 36 months 5.50% 5.89%
36 months 5.95% 6.46%
More than 36 months to 60 months 5.95% 6.87%
More than 60 months to 120 months 5.95% 8.05%
Source: Bank Website. With effect from 02nd November, 2021

DCB Bank FD Rates For Senior Citizens

Senior citizens would continue to receive an additional rate of 0.50 percent on deposits of less than Rs 2 crore across all tenures. With effect from November 2, 2021, the interest rates indicated below are effective on resident Indian Fixed Deposits for elderly individuals.

Tenure Interest rate per annum Effective Annualised Yield (% per annum)
7 days to 14 days 4.85% 4.85%
15 days to 45 days 4.85% 4.85%
46 days to 90 days 4.85% 4.85%
91 days to less than 6 months 5.55% 5.55%
6 months to less than 12 months 5.95% 6.08%
12 months 6.05% 6.19%
More than 12 months to less than 15 months 5.80% 5.93%
15 months to less than 18 months 6.00% 6.18%
18 months to less than 700 days 6.00% 6.28%
700 days 6.45% 6.77%
More than 700 days to less than 36 months 6.00% 6.47%
36 months 6.45% 7.05%
More than 36 months to 60 months 6.45% 7.54%
More than 60 months to 120 months 6.45% 8.96%
Source: Bank Website. With effect from 02nd November, 2021

Story first published: Saturday, November 6, 2021, 15:10 [IST]



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How Are Markets Expected To Fare In November?

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oi-Roshni Agarwal

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The previous week to November 4, 2021 was a truncated one owing to the festive holidays nonetheless on the Muhurat trading that commemorates the new Samvat 2078, there was seen resilience with Nifty again hitting levels of 17,917, while Sensex made it to 60,067 points after gaining 295 points during the 1-hour session.

How Are Markets Expected To Fare In November?

How Are Markets Expected To Fare In November?

“We believe ongoing consolidation after around 15% rally seen over past four weeks would make the market healthy. Hence, dips should be capitalised on to accumulate quality stocks to ride the next leg of the up move”, says the ICICI Direct Research report.

Notably as for how the markets shall perform in the week ahead to November 12 and in the entire month here are the few considerations:

1. The US markets ended Friday’s session at record closed moved by the strong jobs data even from the private payrolls. This would also be seen reflecting on Asian indices when they start trading on Monday (October 8, 2021)

2. OPEC + oil producing nations have rejected the US’ call to increase the supply and amid it prices have been seen to gain by as much as 3 percent. Brent crude has been hovering above the $80 per barrel level. So by and large the price of crude shall remain elevated and amid it Indian markets tend to do be good.

3. Back home, impact of the fuel excise duty cut shall also be strengthening investor sentiment. So, as concerns around inflation may ease and impetus to the economic recovery will find more traction, bulls may be taking grip.

4. Also, in the US asset tapering timeline has been provided and as early as November the US Fed will reduce its asset buying by $15 billion per month .

“Given a slew of significant economic data releases and the ongoing earnings season, the volatility experienced this week is expected to persist into the forthcoming week as well,” Shah said- head of research at Samco Securities.

Now overall support lent by the FIIs as the Fed is now out with its monetary policy view and the other positive and local positives may have a positive impact. Nonetheless, historically, bears have lead the November month.

GoodReturns.in

Story first published: Saturday, November 6, 2021, 15:05 [IST]



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Indusind Bank says whistleblower claims baseless; gave 84k loans sans client consent in May, BFSI News, ET BFSI

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Mumbai, 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 the 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 of these 84,000 clients were active with the loan outstanding at Rs 34 crore, which is 0.12 per cent of the September-end portfolio, the bank said, adding that it carries necessary provisions against the loans.

It also said that the Standard Operating Procedure has since been revised to make biometric authorization compulsory, and that in October 2021, nearly 100 per cent of the loan disbursements were in the bank accounts of the customers, as in pre-COVID time.

During the pandemic, customers faced operational difficulties and some have turned to intermittent payers, though a large part of them demonstrated a strong intent to repay on many occasions, the bank statement said.

The bank added that help was rendered to such clients, including through additional liquidity support to the extent of 20 per cent of the outstanding as on February 29, 2020 as applicable under the ECLGS (Emergency credit line guarantee Scheme), restructuring, and additional loan with a longer tenor and lower EWI (equated weekly instalments) for customers, after they cleared of their arrears and with their due consent.

It can be noted that nearly all the lenders have reported reverses on the microloans front since the beginning of the pandemic. The activity is concentrated in rural areas, where field agents of a lender go deep to disburse loans and also collect dues in cash on a weekly basis.

With the easing of the lockdown measures, all lenders are reporting an improvement in collections and also disbursements.

Indusind Bank management had reported an increase in stress in the microfinance loans portfolio, with the gross non-performing assets ratio moving up to 3.01 per cent as of September, up from 1.69 per cent in June.

The fresh slippages in the book had stood at Rs 1,070 crore in the September quarter, while the net after-recoveries and upgrades stood at Rs 460 crore.

As per the media report on Friday, communication from the whistleblowers to the bank’s chief executive Sumant Kathpalia, independent directors and RBI officials had happened between October 17 and October 24. Additionally, there was also an “outsider” who had written to RBI on October 14, it said.

The report had highlighted that a month prior to the October 14 complaint, BFIL’s non-executive chairman M R Rao had stepped down and also flagged RBI’s concerns on the loans given without customer consent in his resignation letter, calling it a deliberate act to shore up repayment rates. PTI AA DRR DRR



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Yes Bank Revises Fixed Deposit Interest Rates: Check Latest Rates Here

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Yes Bank FD Rates For Regular Customers

Yes Bank modified its term deposit interest rates on November 3, 2021, and now provides a rate of 3.25 percent on deposits maturing in 7 to 14 days, 3.5 percent on deposits maturing in 15 to 45 days, and 4 percent on deposits maturing in 46 to 90 days. On term deposits maturing in 3 months to less than 6 months, Yes Bank offers 4.5 percent, and on deposits maturing in 6 months to less than 9 months, the bank offers a 5% interest rate.

The Bank offers a 5.25 percent interest rate on FDs with a maturity period of 9 months to less than one year and a 6% interest rate on term deposits with maturity duration of one year to less than three years. FDs with maturities ranging from three to less than ten years will return 6.25 percent interest to the general public as of now. For a deposit amount of less than Rs 2 Cr, here are the latest interest rates of Yes Bank on fixed deposits of regular customers.

Period Interest rates per annum
7 to 14 days 3.25%
15 to 45 days 3.50%
46 to 90 days 4.00%
3 months to 4.50%
6 months to 5.00%
9 months to 5.25%
1 Year to 6.00%
3 Years to 6.25%
Source: Bank Website

Yes Bank FD Rates For Senior Citizens

Yes Bank FD Rates For Senior Citizens

On their deposits of less than Rs 2 cr, elderly folks will continue to get an additional rate of 0.50% across all tenors. Following the latest adjustment made by the bank on fixed deposit interest rates, senior citizens will now get the following rates on their term deposits.

Period Interest rates per annum
7 to 14 days 3.75%
15 to 45 days 4.00%
46 to 90 days 4.50%
3 months to 5.00%
6 months to 5.50%
9 months to 5.75%
1 Year to 6.50%
3 Years to 7.00%
Source: Bank Website

Yes Bank Recurring Deposit Interest Rates

Yes Bank Recurring Deposit Interest Rates

Yes Bank has also adjusted its recurring deposit interest rates. Yes Bank is providing the following interest rates on recurring deposits maturing in 6 months to less than 10 years, effective from November 3, 2021.

Period Interest Rate (per annum) Senior Citizen Rates (per annum)
6 Months 5.00% 5.50%
9 Months 5.25% 5.75%
12 Months 6.00% 6.50%
15 Months 6.00% 6.50%
18 Months 6.00% 6.50%
21 Months 6.00% 6.50%
24 Months 6.00% 6.50%
27 Months 6.00% 6.50%
30 Months 6.00% 6.50%
33 Months 6.00% 6.50%
36 Months 6.25% 7.00%
5 years upto 10 Years 6.25% 7.00%
Source: Bank Website



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How Will Gold Price React To The Robust US October Jobs Number?

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oi-Roshni Agarwal

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After scaling to record highs in the previous year, gold is down almost 15 percent or Rs. 8751 considering the all time high of Rs. 56,200 on the MCX. Now as there are a host of factors impacting gold prices and particularly the bearing of the US dollar index movement and bond yields, gold has been seeing respite and has once again climbed the key $1800 per ounce key psychological level.

How Will Gold Price React To The Robust US October Jobs Number?

How Will Gold Price React To The Robust US October Jobs Number?

The main factor supporting gold price as of now has been dollar index which due to ample liquidity into the global system as well as near zero interest rates has been losing ground. Last the dollar index hovered lower by 0.14% to end the session at 94.22. Likewise, there have been seen softening in the US bond yield which went down by 0.12 percent.

US jobs data to cause softening in gold price in the near term

As per the Labour department data released on Friday, there has been an improvement in the jobs number for the October month. The unemployment rate went down to 4.6 percent with non-farm payrolls gaining more than expected. There has been an exorbitant increase in the payroll number by 5.31 lakhs for the month as against 4.5 lakh estimated by the Dow Jones. Private payroll situation was even more robust

Now as jobs indicate the economic growth stance, the recent data will boast of a promising economic growth scenario. The sentiment shall revive risk-on sentiment and hence dent the appeal of the precious yellow metal going forward in the near term.

Nonetheless, a whole lot of reasons are suggesting gold will see positive rate trend going forward, the prime being the global central banks’ continuation with the accommodative monetary policy stance in order to provide the best possible support.

GoodReturns.in

Story first published: Saturday, November 6, 2021, 12:47 [IST]



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Top 5 Banks Promising Best Returns On 3-Year FDs To Regular & Senior Citizens

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RBL Bank

RBL Bank is giving an interest rate of 6.30 percent to the general public and 6.80 percent to senior citizens on deposits of less than Rs 2 crore maturing in three years. Here are the bank’s current interest rates on fixed deposits for a period of up to three years.

Period of deposit Interest Rates p.a. Senior Citizen Interest Rates p.a.
7 days to 14 days 3.25% 3.75%
15 days to 45 days 3.75% 4.25%
46 days to 90 days 4.00% 4.50%
91 days to 180 days 4.50% 5.00%
181 days to 240 days 5.00% 5.50%
241 days to 364 days 5.25% 5.75%
12 months to less than 24 months 6.00% 6.50%
24 months to less than 36 months 6.00% 6.50%
36 months to less than 60 months 6.30% 6.80%
Source: Bank Website. W.e.f. 1st September 2021

YES Bank

YES Bank

On deposits of less than Rs 2 crore maturing in three years, Yes Bank is offering a 6.25 percent interest rate to the general public and a 7.00 percent interest rate to elderly folks. The bank’s current interest rates on fixed deposits for up to three years are listed below.

Period Regular Senior Citizens
7 to 14 days 3.25% 3.75%
15 to 45 days 3.50% 4.00%
46 to 90 days 4.00% 4.50%
3 months to 4.50% 5.00%
6 months to 5.00% 5.50%
9 months to 5.25% 5.75%
1 Year to 6.00% 6.50%
3 Years to 6.25% 7.00%
Source: Bank Website. W.e.f. 3rd November, 2021

IndusInd Bank

IndusInd Bank

IndusInd Bank is granting a 6% interest rate to the general public, and a 6.50 percent interest rate to the elderly on their deposits of less than Rs 2 crore maturing in three years. The current interest rates on fixed deposits with the bank for up to three years are shown below.

Tenure Rate for Regular Citizens (% per annum) Rate for Senior Citizens (% per annum)
7 days to 14 days 2.5 3
15 days to 30 days 2.75 3.25
31 days to 45 days 3 3.5
46 days to 60 days 3.25 3.75
61 days to 90 days 3.4 3.9
91 days to 120 days 3.75 4.25
121 days to 180 days 4.25 4.75
181 days to 210 days 4.6 5.1
211 days to 269 days 4.75 5.25
270 days to 354 days 5.5 6
355 days to 364 days 5.5 6
1 Year to below 1 Year 6 Months 6 6.5
1 Year 6 Months to below 1 Year 7 Months 6 6.5
1 Year 7 Months to below 2 Years 6 6.5
2 years to below 2 years 6 Months 6 6.5
2 years 6 Months to below 2 years 9 Months 6 6.5
2 years 9 months upto 3 years 6 6.5
Above 3 years upto 61 months 6 6.5
Source: Bank Website. W.e.f. July 23rd, 2021

DCB Bank

DCB Bank

On deposits of less than Rs 2 crore maturing in three years, DCB Bank is providing 5.95 percent to the general public and 6.45 percent to senior persons. The bank’s current interest rates on fixed deposits for up to three years are listed below.

Tenure Rate for Regular Citizens (% per annum) Rate for Senior Citizens (% per annum)
7 days to 14 days 4.35% 4.85%
15 days to 45 days 4.35% 4.85%
46 days to 90 days 4.35% 4.85%
91 days to less than 6 months 5.05% 5.55%
6 months to less than 12 months 5.45% 5.95%
12 months 5.55% 6.05%
More than 12 months to less than 15 months 5.30% 5.80%
15 months to less than 18 months 5.50% 6.00%
18 months to less than 700 days 5.50% 6.00%
700 days 5.95% 6.45%
More than 700 days to less than 36 months 5.50% 6.00%
36 months 5.95% 6.45%
Source: Bank Website. W.e.f. 02nd November 2021

Bandhan Bank

Bandhan Bank

Bandhan Bank is offering 5.50 percent to the general public and 6.25 percent to senior citizens on deposits of less than Rs 2 crore maturing in three years. The bank’s most recent fixed deposit interest rates for up to three years are mentioned below.

Tenure Rate for Regular Citizens (% per annum) Rate for Senior Citizens (% per annum)
7 days to 14 days 3.00% 3.75%
15 days to 30 days 3.00% 3.75%
31 days to Less than 2 months 3.50% 4.25%
2 months to less than 3 months 3.50% 4.25%
3 months to less than 6 months 3.50% 4.25%
6 months to less than 1 year 4.50% 5.25%
1 year to 18 months 5.50% 6.25%
Above 18 months to less than 2 years 5.50% 6.25%
2 years to less than 3 years 5.50% 6.25%
Source: Bank Website. W.e.f. June 7, 2021



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IndusInd Bank says whistleblower claims baseless; gave 84k loans sans client consent in May

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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 the 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 of these 84,000 clients were active with the loan outstanding at ₹34 crore, which is 0.12 per cent of the September-end portfolio, the bank said, adding that it carries necessary provisions against the loans.

It also said that the Standard Operating Procedure has since been revised to make biometric authorization compulsory, and that in October 2021, nearly 100 per cent of the loan disbursements were in the bank accounts of the customers, as in pre-Covid time.

During the pandemic, customers faced operational difficulties and some have turned to intermittent payers, though a large part of them demonstrated a strong intent to repay on many occasions, the bank statement said.

The bank added that help was rendered to such clients, including through additional liquidity support to the extent of 20 per cent of the outstanding as on February 29, 2020 as applicable under the ECLGS (Emergency credit line guarantee Scheme), restructuring, and additional loan with a longer tenor and lower EWI (equated weekly instalments) for customers, after they cleared of their arrears and with their due consent.

Also read: IndusInd Bank Q2 net profit up 72%

It can be noted that nearly all the lenders have reported reverses on the microloans front since the beginning of the pandemic. The activity is concentrated in rural areas, where field agents of a lender go deep to disburse loans and also collect dues in cash on a weekly basis.

With the easing of the lockdown measures, all lenders are reporting an improvement in collections and also disbursements.

IndusInd Bank management had reported an increase in stress in the microfinance loans portfolio, with the gross non-performing assets ratio moving up to 3.01 per cent as of September, up from 1.69 per cent in June.

The fresh slippages in the book had stood at ₹1,070 crore in the September quarter, while the net after-recoveries and upgrades stood at ₹460 crore.

As per the media report on Friday, communication from the whistleblowers to the bank’s chief executive Sumant Kathpalia, independent directors and RBI officials had happened between October 17 and October 24. Additionally, there was also an “outsider” who had written to RBI on October 14, it said.

The report had highlighted that a month prior to the October 14 complaint, BFIL’s non-executive chairman MR Rao had stepped down and also flagged RBI’s concerns on the loans given without customer consent in his resignation letter, calling it a deliberate act to shore up repayment rates.

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