Bank conducting independent investigation from outside agency, awaiting final report; share fell by 3.86 per cent

New Delhi| Private sector IndusInd Bank’s net worth could decline by 2.35 per cent or Rs 1,577 crore by December, 2024 due to discrepancies in derivative accounts. Its effect can be seen in the fourth quarter results of the bank. Derivatives accounts are used to trade through financial contracts. At the same time, the bank’s shares fell by 3.86 percent on Monday due to RBI’s decision to extend the tenure of the bank’s CEO and Managing Director Sumant Kathpalia by one year instead of three years.

The bank gave information to the stock market
The bank told the stock market that the discrepancies revealed in the derivatives book in the internal review had been identified by September-October. It has also violated the rules of RBI in force since April, 2024. The central bank has also been informed about this. The bank said, an external agency has been appointed for an independent investigation into the discrepancies. His final report is awaited.

The profitability and capital adequacy of the bank is better to bear this impact. RBI had changed the rules governing the investment portfolio of commercial banks in September, 2023. At the same time, CEO Kathpalia claimed that the bank is capable of dealing with the impact on net worth. It is noteworthy that the net worth of the bank is 62,000 crores.

Discrepancies not linked to customers’ accounts
The bank’s deputy CEO Arun Khurana claimed that the discrepancies were not linked to customers’ accounts. However, he did not reveal their nature. Khurana said, we confirm that there will be no internal trade in our book from April 1. Whatever internal trade existed before this period has been abolished.