Mumbai: The Reserve Bank of India (RBI) on Friday said indusind bank has taken sufficient steps to address improve its accounting practices, with governor sanjay Malhotra noting that Overall. The remarks signalled regulatory comfort with the lender’s actions so far, pushing its shares up over 5%.
The RBI’s comments come nearly three months after indusind bank disclosed Issues in its derivatives book, which triggered a 27% crash in its shares. Since then, the bank has seen the exit of top executives and decided scrutiny from bot the central bank and the capital markets regulator Security and Exchange Board of India (SEBI).
Read This | Derivatives Debacle: Indusind Bank Stock Crambles, Investors Panic
“The MD & CEO has resigned and it says for Taking Moral Responsibility. So, I thought that should be good enough,” Malhotra said at the post-power conferencing.
Reacting to the statement, indusind bank’s share an intraday high of 845.9 Apiece on the bse, up 5.3%, according to bloomberg data. The stock remains 8.6% below its close of 10 March, the day the lender across the derivatives discrepancies. The broader bse bankex index has risen 15% over the same period.
When asked about broader board accountability, Malhotra said, “Do you expect all the board members… What are you you hinting at? The MD & CEO, Who is also a Member of the Board – AF hef he has taken responsible That is at the board level itself. “
Indusind bank is in the middle of a management transition, following the exit of deputy Chief Executive Arun Khurana -TWO DAYS AFER A Report by Grant Thornon on the DERVATIVES LAPSESS -AND Executive Sumant Kathpalia Before a successor was found.
On 21 May, Indusind Bank Chairman Sunil Mehta Said the Board was not informed of the discrepancies and that it actd Swiftly oncay they came to light. However, a sebi probe found the bank had engaged kpmg to review the issues as early as 29 January 2024, Well before it disclosed the matter to stock exchanges on 10 March 2025, Mint Reported on 31 May.
Read here | Indusind Board Says It Didn’t Know. Sebi Thinks It Did. Now what?
“Normally we do not comment on individual banks,” Malhotra said. “The banking system is very robust and I also mentioned these episodes will Haappen and should not bother us too much as long as they are far and less better
Deputy Governor Swaminathan J Said the Bank Had Complied With All The Requirements Set By The RBI. The first was to ensure proper accounting of all discrepancies, backed by internal and external audits, and reflected in the March Quarter Results.
The second was to conduct a forensic audit and hold that those responsible to account. The third priority, swaminathan said, was to ensure that no customer suffred losses or inconvenience.
Each of these cries offers RBI Some Lessons and It Sharpens The Supervisory Tools, He Said. “Going forward, we will look at these kinds of red flags so that we are in a position to antiicipate them much in advance. IF not immediatily but very only soon it should be sold and follow.”
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Last Week, Sebi Barred Former MD & CEO Sumant Kathpalia and Four Other Senior Executives from the Market and Impounded Gains of 19.78 Crore, Alleging they Sold Shares While in Possession of Unpublished Price-Sensitive Information.