Not surprisingly, IndusInd Bank is opened in the red and soon took the position of being the top loser on the BSE. The stock opened almost 5.5% lower at Rs.1125 and went down to an intraday low of Rs.1053.45, while its 15% LC of the day is at Rs.1010.45.
The Bank has been accused by a whistleblower of “evergreening” its loans. Evergreening is a well-known process – a loan which is on the verge of a default is revived by the Bank by giving more loans to the same company. There will be an immediate fall in the defaults but very soon, there will be an explosion of default rates.
The Bank has obviously denied this. It said, “the allegations made by certain anonymous individuals purportedly acting as whistleblowers, as published in the Mumbai edition of The Economic Times on November 5, 2021 titled as “Whistleblowers Raise Loan Evergreening Issue at IndusInd Arm” are grossly inaccurate and baseless. The statements quoted in the report overlook factual aspects.”
The Bank said that its bad loan recognition process is fully automated in accordance with the regulatory norms.