Bharat Financial Inclusion Limited (formerly SKS Microfinance Limited) witnessed instances of fraud including embezzlement of cash, by its employees to the tune of Rs 2.55 crore during the last financial year in over 300 cases.
According to the latest annual report of BFIL, there were 203 cases of cash embezzlement of 1.33 crore and 98 cases wherein loans worth Rs 1.22 crore were given against fictitious documents.
BFIL said in FY 17 the amount of fraud was Rs 1.33 crore in as many as 147 cases.
It recovered 0.98 crore and has written off Rs 0.46 crore in the books in the same year.
"According to the information and explanations given to us, we report that no material fraud by the Company or by its employees or officers has been noticed or reported during the year except for instances of cash embezzlements by certain employees aggregating to an amount of Rs 25,520,321 and out of which an amount of Rs.7,790,197 has been recovered.
The services of the concerned employees have been terminated," the company auditors said in their report.
More From This Section
The micro lender said its technology initiatives are leading to superior overall risk mitigation, owing to a drastic reduction in the cash-handling processes, along with the reduction in fraudulent loans.
"To reduce the potential risks of theft, fraud and mismanagement, the Company has been implementing an integrated cash management system since July 2009 which is operational in approximately 1,419 of its branches as on March 31, 2018.
The system utilises an Internet banking software platform that interfaces with various banks to provide the Company with realtime cash information for these branches and the loan activity therein," BFIL said in the annual report.
The Company believes the integrated system augments its management information systems and facilitates its bank reconciliations, audits and cash flow management.
The system also reduces errors, it added.
BFIL said its vision is to serve 50 million households across India and other parts of the world and also create a commercial microfinance model that delivers high value to our customers.
According to the report, it has a gross loan portfolio of Rs 12,594.4 crore, 72.7 lakh members (excluding Andhra Pradesh and Telangana) and 1,567 branches.