India's largest micro finance institution, SKS Microfinance has terminated the services of some of its employees, for cheating the company and embezzling funds worth Rs. 15.8 crore during the last fiscal. The company has already written off about Rs. 14 crore of the total funds which were embezzled.
The audits of the company reveal Rs. 2.5 crore worth of cash embezzlement and Rs. 13.3 crore worth of loans were given to non-existent borrowers.
Talking on this matter, the auditors of the company, S R Batliboi & Co said, "We have been informed that during the year there were instances of cash embezzlements by the employees of the company aggregating Rs 2,50,91,317; and loans given to non-existent borrowers on the basis of fictitious documentation created by the employees of the company aggregating Rs 13,33,13,975."
The auditors further added that, "The services of all such employees involved have been terminated and the company is in the process of taking legal action. The outstanding balance (net of recovery) aggregating Rs 14,24,40,656 has been written off."
SKS microfinance has reportedly said that employee frauds are inherent to the nature of the business the company operates in as most of the transactions are cash based.
SKS microfinance is a non banking finance institution, which provides loans and micro insurance policies to the poor and underprivileged.