More Stories

Informist, Friday, Jun. 6, 2025

 

Please click here to read all liners published on this story

--RBI Malhotra: Let us not be speculative on IndusInd Bank fraud 
--RBI Malhotra on IndusInd Bk: Won't fail in our duty if we have to step in 
--RBI Malhotra: Law will take its course on IndusInd fraud 
--RBI Malhotra: IndusInd MD, CEO has resigned, that should be good enough 
--RBI Malhotra on IndusInd Bank: MD, CEO resigning should be good enough 
--RBI Swaminathan: On IndusInd, issue should settle down very soon 
--RBI Swaminathan on IndusInd Bank: Will keep monitoring banking system 
--RBI Swaminathan on IndusInd Bk: Priority is customers don't face any loss 
--RBI Swaminathan: No systemic impact arising from IndusInd Bank issue 
--RBI Malhotra on IndusInd Bk: Episodes don't bother us if few and far between 
--RBI Malhotra: IndusInd has taken enough steps to improve accounting practices 
--RBI Malhotra on IndusInd: Bank doing well on the whole 
--RBI Malhotra: On IndusInd, "Normally we do not comment on individual banks"
 

 

MUMBAI – The resignation of Sumanth Kathpalia, the former managing director and chief executive officer of IndusInd Bank, "should be good enough", Reserve Bank of India Governor Sanjay Malhotra said while addressing questions around the recent debacle at India's fifth largest private sector bank.

 

"The MD, CEO has resigned for taking moral responsibilities, I thought that should be good enough. Do you expect that all the board members...? What are you hinting at? I think the MD, CEO if he has taken responsibility, that is at the board level itself," Malhotra said when asked if the RBI will ensure accountability from the board of IndusInd Bank.

 

Kathpalia and Arun Khurana, the bank's deputy chief executive officer, resigned after irregularities at the bank became public.

 

In an exchange filing on Mar. 10, IndusInd Bank said it had found discrepancies in the accounting of its derivative portfolio and expected this discrepancy would lead to an impact of about 2.35% on its net worth or INR 19.60 billion. Consequently, the bank reported a net loss of INR 22.36 billion for the quarter ended March.

 

In April, after an independent audit, the bank said the accounting hit from these trades had been estimated at INR 19.79 billion, and it would be "appropriately" reflected in the statements for FY25. The segment results showed a loss of INR 14.57 billion on account of treasury operations in the March quarter.

 

Malhotra said speculation around the issue should be avoided and law should be allowed to take its due course. "In case RBI has to step in and take any action, then RBI will not be failing in its duty," he said.

 

The governor also said that such issues don't bother the central bank as long as they are far and few in between. IndusInd Bank has taken steps to improve its accounting practices, Malhotra said. After the governor's comments, shares of IndusInd Bank rose over 4% to a high of INR 845.85 on the National Stock Exchange. At 1423 IST, shares of the bank were 2.8% higher at INR 825.50. 

 

RBI Deputy Governor Swaminathan J. also said that the issue should settle down very soon. The central bank's priority remains that customers don't face any losses and that the accounting is done properly, Swaminathan said.

 

There is no impact on the broader banking system from the IndusInd Bank issue, Swaminathan said. "We will keep monitoring the system as a whole," he said. "Each of these crisis gives us some lessons, we sharpen our supervisory tools and we calibrate our supervisory approach basis the lesson that we learn from this, so going forward we will look for these kind of red flags..." he said.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Kabir Sharma

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.