Mahindra Finance Reports drop 10% in the fourth quarter with net profit of Rs.619 Crore
Mahindra Finance, one of India’s leading non-banking financial companies, not long ago reported a 10% drop in its net profit for the fourth quarter. The company showed a net profit of Rs.619 crore for the quarter ending in March, Which has declined significantly, compared to last year’s March quarter result which was Rs.687. This decline in quarterly profit can be credited to of few key factors.
Firstly, Mahindra Finance saw that the provision for bad loans was increasing considerably during the fourth quarter. The company also said that their Aizawl branch has identified a total of 2887 loan accounts that were potentially fraudulent in nature. This act is a big setback as “these loan accounts were holding 135.9 crore rupees of recoverable balance as of March 31st, 2024,” said Mahindra Finance during a regulatory filing.
The Non-Banking Financial Company, which delayed disclosing their financial statement because of the fraud that happened at one of their branches in the northeastern states, said that the fraud is usually related to vehicle loans that have been paid out by the company; this fraud includes external parties such as vehicle dealers and other parties.
This type of scam involves things like creating a fake KYC and other false documents related to assets for the individual So that embezzlement of company funds can be easy and hassle-free. To counter this company decided to appoint a law firm and an accounting firm that will look into this information and data, which are produced by individuals and fact-check them and assess if any irregularities are suspected.
Moreover, Mahindra Finance said, “As a proactive step, the company has identified a few key initiatives to further strengthen controls, including but not limited to accelerating the timeline for centralization of document reviews and implementing digital due diligence tools for customer onboarding.”
