More top-level exits at IndusInd Bank’s micro-finance arm Bharat Financial amid loan book audit: Report

In a leadership reshuffle following these exits, the company has promoted Gopi Krishna A as the new Head of Member Services.

IndusInd Bank’s microfinance arm, Bharat Financial (BFIL), is seeing a fresh round of senior-level exits as scrutiny intensifies over its lending practices and accounting lapses, according to a news report by NDTV Profit.

Two senior executives appointed by the bank, Chief Operating Officer and Head of Member Services Vikas Muttoo and Joint COO Anujeet Varadkar, have resigned from their posts, the channel reported citing people familiar with the developments. These exits come shortly after the departure of MFI’s Executive Vice Chairman J Sridharan last month.

Moneycontrol is yet to independently verify this report.

Muttoo had joined BFIL in 2023 from RBL FinServ and was one of the key officials brought in by IndusInd Bank to manage the microfinance operations. Varadkar, the former MD & CEO of Svatantra Microfinance, came on board in 2024.

In the leadership reshuffle following these exits, the micro-finance arm has promoted Gopi Krishna A as the new Head of Member Services. Krishna has been with Bharat Financial Inclusion, formerly known as SKS Microfinance, for nearly two decades. IndusInd Bank had acquired BFIL in 2019.

The senior-level churn follows an internal audit of the bank’s microfinance portfolio, which is being conducted by IndusInd Bank’s internal audit team with support from global consultancy firm EY. The audit was ordered after discrepancies such as incorrect balances and poor provisioning came to light in the microfinance division.

Moneycontrol had reported on June 24 that loans worth around Rs 6,000–7,000 crore are under review for possible irregularities. Most of these are small-ticket, unsecured loans. Some of them may have been wrongly labelled as agriculture loans, even though they were linked to microfinance institution (MFI) lending.

According to Moneycontrol, these loans were allegedly issued to prevent existing MFI loans from turning non-performing. “What has happened is not a classic case of loan rollover but something like that,” a banker aware of the developments told the publication on condition of anonymity.