Stock Shock: Why is IndusInd bank down 10%

IndusInd Bank shares plunged over 10% in Monday's trade to Rs 1,068.

This comes after a report said a group of senior employees of IndusInd Bank's arm, Bharat Financial Inclusion (BFIL), have alerted the Reserve Bank of India (RBI) about lapses in governance and accounting norms to allegedly 'evergreen' loans running into thousands of crores since the outbreak of Covid-19.

However, the management of IndusInd Bank has refuted the allegations around the evergreening of loans, citing it as ‘inaccurate and baseless.’

The private bank mentioned, "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. This issue was highlighted by the field staff within two days and the technical glitch was rectified expeditiously."

Motilal Oswal in a note said that the stock could witness some pressure due to adverse media articles and the asset quality stress reported by some other MFI lenders. Nevertheless, the brokerage expects the impact to be controlled. "We maintain BUY, with unchanged target price of ₹1,400," said Motilal Oswal.