The Indian Renewable Energy Development Agency (IREDA) has officially marked the loan accounts of Gensol Engineering Ltd and its subsidiary, Gensol EV Lease Ltd, as fraud. This decision has been reported to the Reserve Bank of India (RBI). IREDA is a government-owned company that gives loans for green energy projects. This move is a big step in the ongoing legal and regulatory battle against the renewable energy firm.

According to the stock exchange filing, the total money involved is quite large. Gensol Engineering has outstanding dues of ₹453.77 crore. Its subsidiary, Gensol EV Lease, owes another ₹218.97 crore. IREDA has accused them of 'misappropriation' (using money for the wrong purpose) and 'criminal breach of trust'. The lender also claims the company used forgery (making fake documents) to cheat the bank and get financial help.

For bank officers, this case is a textbook example of how fraud risk management works. IREDA followed the RBI’s Master Direction, which is a set of rules on how to handle bad accounts. By March 31, 2026, the lender had already set aside money (provisioning) for 85 per cent of the total dues. This high provisioning ensures that the bank's balance sheet is protected if the money is never recovered.

This is not the first time Gensol has been in trouble. Earlier in April 2025, the Securities and Exchange Board of India (SEBI) found that funds were being moved out of the company illegally. SEBI also found that the company had faked documents to show they were paying back their loans on time. Because of these serious issues, SEBI banned promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding top jobs in the company.

The trouble started when credit rating agencies like CARE and ICRA dropped the company’s rating to 'default' grade. They noticed that the company was not paying its debts on time. The investigation later revealed that the company had even forged 'conduct letters' (letters that say a borrower is behaving well) that supposedly came from IREDA and the Power Finance Corporation (PFC).

IREDA is now fighting to get its money back through multiple legal channels. They have started recovery cases at the Debt Recovery Tribunal (DRT), which is a special court for bank loan recovery. They have also filed for insolvency (legal process for bankrupt companies) against Gensol Engineering. This means the bank is trying to take control of the company’s assets to pay off the huge debt.

For aspirants and bankers, this story highlights the importance of 'due diligence' (checking facts carefully). It shows how faking simple documents like bank conduct certificates can lead to a massive collapse. Bankers must keep a close watch on stock market filings and SEBI orders, as these often give early warning signs of a company going bad.

In the coming months, the industry will watch the Debt Recovery Tribunal's decision. The outcome of the insolvency case will determine how much money IREDA can actually recover. This case serves as a warning for the renewable energy sector, showing that even 'green' companies must follow strict financial rules and ethical standards.