IndusInd Bank's subsidiary defers review of decision to relieve top 2 execs

Private sector lender IndusInd Bank on Monday said two of the top executives of its subsidiary, Bharat Financial Inclusion (BFIL), have tendered their resignation but have offered their assistance in the ongoing review of certain transactions that happened at the company, which resulted in the bank appointing an international audit firm to conduct an independent review.

Having said that, the bank informed the stock exchanges that the board of BFIL has put off the consideration of the decision to relieve these two executives off their positions until the ongoing review of certain transactions at Bharat Financial Inclusion is completed.

In an exchange filing, the bank said, “Mr Shalabh Saxena and Mr Ashish Damani, currently employed with BFIL in the capacity of the Managing Director & CEO and the Executive Director & CFO, respectively, have tendered their resignations pursuant to emails addressed to the Chairman of the Board of BFIL on November 25, 2021.”

Saxena and Damani have been appointed as the MD & CEO and President & CFO of Spandana Sphoorty, respectively.

“Both the employees have offered their assistance in the ongoing review of transactions related to BFIL, for which the bank has appointed a renowned international audit firm to conduct independent review and ascertain veracity of the anonymous complaints. The board of BFIL has deferred consideration of the decision to relieve them until the completion of the ongoing review,” the lender said.

Last week, the bank had said that the two top executives of BFIL cannot be relieved from their positions until the review of certain transactions at the company is completed. Earlier this month, the bank had said that BFIL had disbursed nearly 84,000 loans without customer consent in May due to a technical bug. The bank said an independent review has been initiated to see if there was any process lapse or accounting failure at BFIL.

According to the terms of their employment agreement with BFIL, Saxena and Damani are prohibited from accepting employment at a competitor such as SSFL, unless approved in writing by the board of BFIL.

Meanwhile, the lender has nominated J Sridharan, who has over two decades of experience in managing finance, governance and MIS functions at the bank, as Executive Director on the board of BFIL and Srinivas Bonam to oversee the day-to-day functioning of BFIL. It has also appointed KV Rao, former Chief Operating Of!icer and Head Member Services for 11 years at BFIL, as an advisor for strengthening the field processes.