NEW DELHI: In a curious turn of events, IndusInd Bank on Tuesday claimed that two top executives of its wholly-owned subsidiary Bharat Financial Inclusion Limited (BFIL) have not been relieved by the company yet and that they cannot join Spandana Sphoorty Financial Limited, a competitor of BFIL.
Spandana Sphoorthy, a rural-focused non-banking financial company and a microfinance lender (NBFC-MFI), had on Monday announced that Shalabh Saxena and Ashish Damani would join the company soon as MD and CEO and as chief financial officer, respectively.
However, according to an exchange filing on Tuesday by IndusInd Bank, both Saxena who is currently employed with BFIL as MD and CEO and Damani as executive director and chief financial officer have not tendered their resignations from the services of BFIL, and that even if they put in their papers the board's approval will be needed for their resignations to be accepted.
Since Spandana is a competitor of Bharat Financial Inclusion, both 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.
IndusInd Bank has also clarified that certain transactions relating to BFIL are the subject matter of an ongoing review and 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," says the statement from IndusInd Bank.
Queries sent to Spandana seeking their comment on the issue remained unanswered till the time of filing of the report.
Recently, BFIL was in the news after whistleblowers alleged that the MFI was indulging in evergreening of loans worth thousands of crores after the outbreak of Covid, and that the company was adjusting new loan money with overdues from earlier loans. It was also alleged that the bank disbursed loans without the consent of customers.
Though the company refuted the allegations of evergreening of loans, it did admit that 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.