Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

IREDA Classifies Gensol Engineering and Gensol EV Lease Accounts as Fraud, Reports Cases to RBI

Indian Renewable Energy Development Agency Ltd. (IREDA) has classified the loan accounts of Gensol Engineering Ltd. and its subsidiary Gensol EV Lease Ltd. as fraud in accordance with the Reserve Bank of India's Master Direction – Fraud Risk Management in Non-Banking Financial Companies (NBFCs) Directions, 2024. The development was disclosed through a regulatory filing submitted to the BSE and the National Stock Exchange (NSE) under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

According to the filing dated July 10, 2026, IREDA stated that the fraud classification follows its earlier disclosures regarding the two borrower accounts. As required under RBI regulations, the company has reported both accounts to the central bank after formally declaring them as fraudulent.

IREDA reported that Gensol Engineering Ltd. has an outstanding exposure of Rs 453.77 crore. The account has been classified as fraud on grounds including misappropriation, criminal breach of trust, and forgery involving the creation of false documents and electronic records with the intention to commit fraud. The company has already made provisions equivalent to 85 percent of the outstanding amount as of March 31, 2026, reflecting a significant level of provisioning against the exposure.

The second account relates to Gensol EV Lease Ltd., a subsidiary of Gensol Engineering, which has an outstanding loan exposure of Rs 218.97 crore. IREDA stated that this account has been classified as fraud due to misappropriation and criminal breach of trust, with the lender also maintaining 85 percent provisioning against the outstanding amount as of the end of FY 2025-26.

Combined, the two borrower accounts represent an outstanding exposure of approximately Rs 672.74 crore. The high provisioning level indicates that IREDA had already recognised a substantial portion of the potential credit risk in its financial statements before the formal fraud declaration.

The fraud classification has been carried out in compliance with the RBI's Master Direction on Fraud Risk Management for NBFCs, 2024, which requires regulated entities to identify, classify, and report fraud cases promptly while strengthening governance, internal controls, and risk management practices. Reporting such cases to the RBI is a mandatory regulatory requirement intended to improve transparency and safeguard the stability of the financial system.

As India's largest dedicated green financing institution, IREDA plays a crucial role in funding renewable energy, energy efficiency, electric mobility, and other sustainable infrastructure projects. The company finances a broad range of clean energy assets, including solar, wind, hydropower, bioenergy, green hydrogen, battery energy storage systems, and emerging clean technologies. Maintaining strong credit risk management and regulatory compliance remains essential as the institution continues to expand its lending portfolio.

The latest disclosure underscores IREDA's adherence to regulatory reporting requirements and prudent risk management practices. While the fraud classification relates specifically to the identified borrower accounts, the substantial provisioning already maintained by the company is expected to help mitigate the financial impact associated with these exposures, subject to ongoing recovery proceedings and applicable legal processes.