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New Delhi: Mahindra & Mahindra Financial Services on Tuesday said it has appointed Mahesh Rajaraman as Chief Risk Officer (CRO) of the company with effect from August 1, 2024.
In a regulatory filing, Mahindra Finance said Mallika Mittal has tendered her resignation and ceased to be the CRO of the company with effect from May 17.
Mittal would be exploring opportunities externally as per her resignation letter. Her resignation would be effective from close of business hours on November 16, 2024, when she would cease to be employee of the company, it added.
The Non-banking Finance Company (NBFC) said in the interim period that Gaurav Verma, Head Underwriting & Product Policy, would exclusively oversee the risk management function and would be responsible for the responsibilities under the role of CRO until Rajaraman joins as the CRO.
Rajaraman, who has been appointed for a 5-year term, holds 29 years of experience in the banking sector with demonstrated ability in leading and building teams, Mahindra Finance said.
He has resigned from City Union Bank where he was serving as Head – Credit. Rajaraman has been associated with various banks namely Yes Bank, HDFC Bank, HSBC Bank and ANZ Grindlays Bank.
During his overall banking career, his areas of expertise and specialisation include retail assets, credit cards, agri lending and SMEs in the domains of policy /risk, underwriting, fraud risk management and anti-money laundering across all banking products.
The change in CRO at the NBFC came after the company detected fraud in the March quarter at one of its branches in the north-eastern states.
The fact-finding assessment of the fraud in its Aizawl branch during the March quarter identified 2,887 loan accounts as potentially fraudulent in nature.
"These loans had an outstanding net recoverable balance of Rs 135.9 crore as of 31st March 2024, which have been fully provided," Mahindra Finance had said.
The fraud relates to retail vehicle loans disbursed by the company and is a case of extreme collusion between the company's employees, with segregated duties, and external parties including vehicle dealers and bank employees.
The fraud involved forgery of KYC and other asset-related documents leading to the embezzlement of company funds. Following this, the company appointed a law firm and an accounting firm to undertake a fact-finding assessment of the suspected irregularities.
Shares of Mahindra Finance were trading at Rs 263.80, down 0.21 per cent over the previous close on the BSE.