Mahindra & Mahindra Financial Services has detected about Rs 150 crore fraud in its vehicle loan portfolio at one of its branches. Hit by this loan fraud, the firm has postponed the board’s agenda to review and approve the financial results for Q4FY24 and FY24. Its board was slated to review financial performance at a meeting on Tuesday.
Meanwhile, as per Business Line, the Reserve Bank of India is now looking into the KYC lapse and the banking regulator could impose some sort of curbs on the non-lender with respect to acquisition of new businesses.
Mahindra Finance said during the end of the fourth quarter of the financial year ended March 31, 2024, a fraud was detected at one of the company's branches in the northeast.
"In respect of retail vehicle loans disbursed by the company, the fraud involved forgery of KYC documents leading to embezzlement of company funds. The investigations in the matter are at an advanced stage. The company estimates that the financial impact of this fraud is unlikely to exceed Rs 150 crore," Mahindra Finance said.
Investigations are underway, and necessary corrective actions have been identified and are at various stages of implementation, including the arrest of a few persons involved, it added.
The board of Mahindra & Mahindra Financial Services, which met on Tuesday, approved a hike in borrowing limit to Rs 1.30 lakh crore, from Rs 1.10 lakh crore currently, and also decided to appoint M M Nissim & Co LLP and M P Chitale & Co as the Joint Statutory auditors of the company for a period of three years.
They will replace Deloitte Haskins & Sells and Mukund M. Chitale & Co upon completion of their 3-year term at the ensuing 34th annual general meeting (AGM) to be held later in the year.
[With PTI inputs]
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