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IndoStar Capital Detects Rs 677 Crore Lapse in Commercial Vehicle Portfolio; Details Here

Loan Scams

IndoStar Capital Detects Rs 677 Crore Lapse in Commercial Vehicle Portfolio; Details Here

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IndoStar Capital Finance Limited, a non banking finance company (NBFC) that is backed by private equities, has said that it has found certain discrepancies in its commercial vehicle loan portfolio. The company in an exchange notice said that it may have to make additional expected credit loss (ECL) provisions between Rs 557 crore-Rs 677 crore due to the “certain observations and control deficiencies” made by an external auditor.

“The audit committee of lndoStar Capital Finance Limited held a meeting today to consider and discuss matters pertaining to an ongoing review by an independent external agency appointed by the company, and approved by the audit committee, with regard to certain observations and control deficiencies identified, during the course of the interim statutory audit of the annual financial statements of the Company, primarily relating to the commercial vehicles loan portfolio of the Company (“CV loan Portfolio”),” said the company in a filing with the BSE on Friday, May 6.

The audit committee was informed that the control deficiencies were primarily with respect to sanctioning of loans to existing customers, loan documentation and policy implementation gaps. “It further appears that such aspects were primarily concerned with a part of the CV Loan Portfolio and may have arisen pursuant to liquidity concerns with customers caused by the onset of the COVID-19 pandemic,” the NBFC said in its disclosure.

The NBFC further said that it appointed Ernst…

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