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Business Upturn
5 days ago
- Business
- Business Upturn
IndusInd Bank shares jump over 3% as RBI Governor says stability expected soon
By Aditya Bhagchandani Published on June 6, 2025, 12:48 IST Shares of IndusInd Bank rose 3.05% to ₹827.70 on Friday after RBI Governor Sanjay Malhotra offered a reassuring statement regarding the bank's ongoing restructuring and succession plans. 'The matter is on track and should stabilise shortly,' Malhotra said, hinting at resolution around recent concerns that had rocked investor sentiment. The stock moved up by ₹24.50 from its previous close of ₹803.20. It traded in the range of ₹805.00 to ₹817.50 during the session. The market cap stood at ₹629.21 billion with a trading volume of 9.88 million shares. Governor Malhotra also acknowledged that IndusInd Bank had taken adequate steps to improve accounting standards and operational practices. This comes as a crucial vote of confidence from the central bank amid a turbulent quarter for the lender. Background context On May 22, the bank reported a rare quarterly net loss of ₹2,328 crore—the first in nearly two decades—due to accounting discrepancies, suspected fraud, and stress in its microfinance segment. The episode led to the exit of CEO Sumant Kathpalia and deputy CEO Arun Khurana, followed by SEBI's interim order restraining them from accessing capital markets over insider trading allegations. The RBI had already denied Kathpalia a full-term extension earlier in March, citing ongoing scrutiny. The core issue stemmed from losses in the derivatives trading portfolio, where internal gaps were identified during compliance reviews. An external audit pegged the financial impact at ₹1,960 crore. The Hinduja-promoted IndusInd Bank has since been coordinating closely with regulators. RBI reportedly laid out two preconditions for promoter-led capital infusion: removal of share pledges and appointment of a promoter representative on the board. Governor Malhotra's latest remarks now suggest that with the necessary measures being implemented, a turnaround is on the horizon. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Time of India
22-05-2025
- Business
- Time of India
Q4 Loss at ₹2.3k Crore: IndusInd Trips on Lapses, Ends in Red
IndusInd Bank said it is probing key management personnel (KMP) for 'wrongful accounting practices' that could amount to fraud, as the Hinduja-promoted lender reported a net loss of ₹2,328 crore in the fourth quarter of FY25, against net profit of ₹2,349 crore a year ago. For FY25, the bank reported a 71% fall in net profit to ₹2,575 crore, as it absorbed the entire financial impact of derivatives-related accounting lapses and underreporting of microfinance bad loans, seeking to start FY26 with a clean slate. In regulatory filings on Wednesday, the bank said investigations into its accounts showed that the top management that exited the company under suspicious circumstances may have committed accounting fraud, misled the board of directors, and hid the truth from auditors to present a rosy picture. The bank said board-commissioned probes 'revealed an involvement of senior bank officials, including former KMPs, in overriding key internal controls.' They also showed 'a concealment from the board and the statutory auditors of the wrongful accounting practices adopted, over such period of time, as indicated in the… investigation/ review reports.' IndusInd said 'there is likely involvement of senior management in the matters' and that it had 'reason to believe that suspected offences involving fraud may have been committed.' The observations were part of the auditors' report filed along with the earnings of the bank. The auditors of the bank are MSKA & Associates and Chokshi & Chokshi LLP. The auditors have referred the suspected fraudulent actions of the past management to the government, which may lead to criminal prosecution. Chairman Sunil Mehta said IndusInd Bank's balance sheet remains healthy after absorbing all the negative charges, with a capital adequacy ratio of 16.24%, a provision coverage ratio of 70%, and a liquidity coverage ratio at 139% in the first half of this quarter. 'The financial impact of all the above has been fully taken in the audited financial statements for FY25. The approach toward financials has been to start FY26 on a clean slate, without carrying forward any issues,' Mehta told analysts soon after announcing the results. 'The bank has thoroughly reviewed all the lines of accounting and has taken a conservative view in some of the accounting treatments. This has reflected in a few one-offs versus the business-as-usual run rate,' he added. The chairman also said the bank will not wait for the new chief executive to join and act on the lapses, while acknowledging that these were not expected from a bank like IndusInd. He said the matter of likely fraud has been reported to the relevant government agency. 'The board has also taken a very serious view with respect to staff accountability across levels to reinforce the governance and compliance culture, and is in the process of taking action for staff accountability,' said Mehta. Erstwhile managing director and chief executive Sumant Kathpalia and deputy CEO Arun Khurana, who were designated as KMP for the period under review, resigned late last month. Mehta said IndusInd is in the process of identifying a new chief executive within the June 30 deadline stipulated by the Reserve Bank of India (RBI). The board had commissioned investigations regarding forex derivatives transactions of Rs 1,960 crore, incorrect interest income of Rs 673.8 crore and fee income of Rs 172.6 crore, apart from certain incorrect manual entries posted in the 'other assets' and 'other liabilities' of the previous year, amounting to Rs 595 crore.
Time of India
21-05-2025
- Business
- Time of India
IndusInd Bank probing key management persons for "wrongful accounting practices"
IndusInd Bank Wednesday said it is probing key management persons for "wrongful accounting practices" that could amount to fraud, as the Hinduja-promoted lender reported a net loss of Rs 2328 crore in the fourth quarter, against net profit of Rs 2,349 crore in the year-ago period. For FY25, the bank reported a 71% fall in net profit to Rs 2,575 crore, as it absorbed the entire financial impact of derivatives-related accounting lapses and underreporting of microfinance bad loans, seeking to start FY26 with a clean slate. In regulatory filings Wednesday, the bank said investigations into its accounts showed that the top management that exited the company in suspicious circumstances may have committed accounting fraud, misled the board of directors, and hid the truth from the auditors to present a rosy picture. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Pare a neuropatia: descubra como NeuroFit Undo The bank said board commissioned investigations 'revealed an involvement of senior bank officials, including former Key Management Personnel (KMP), in overriding key internal controls…, and a concealment from the board and the statutory auditors of the wrongful accounting practices adopted, over such period of time, as indicated in the respective investigation/ review reports.' It said that 'there is likely involvement of senior management in the above matters' and the 'we have reason to believe that suspected offences involving fraud may have been committed.' Live Events The observations were part of the auditors' report filed along with the earnings of the bank. The auditors of the bank are MSKA & Associates and Choksi & Choksi LLP. The auditors have referred the suspected fraudulent actions of the past management to the government, which may lead to criminal prosecution. 'Clean Slate' Meanwhile, Chairman Sunil Mehta said the bank's balance sheet remains healthy after absorbing all the negative charges, with a capital adequacy ratio of 16.24%, a provision coverage ratio of 70%, and a liquidity coverage ratio at 139% in the first half of this quarter. 'The financial impact of all the above has been fully taken in the audited financial statements of the bank for the financial year 2024-25. The bank's approach toward financials has been to start FY25-26 on a clean slate, without carrying forward any of the past issues,' Mehta told analysts soon after announcing the results. 'The bank has thoroughly reviewed all the lines of accounting and has taken a conservative view in some of the accounting treatments. This has reflected in a few one-offs versus the business-as-usual run rate,' he added. Mehta also said the bank will not wait for the new CEO to join and act on the lapses, while acknowledging that such lapses were not expected from a bank like IndusInd. He said the bank has reported the matter of likely fraud to the relevant government agency. 'The board has also taken a very serious view with respect to staff accountability across levels to reinforce the governance and compliance culture and is in the process of taking action for staff accountability,' he said. Erstwhile MD & CEO, Sumant Kathpalia, and Deputy CEO Arun Khurana, who were designated as KMP for the period under review, resigned late last month. Mehta said that the bank is in the process of identifying a new CEO within the June 30 deadline stipulated by the Reserve Bank of India (RBI). The board had commissioned investigations regarding forex derivatives transactions of Rs 1,960 crore, incorrect interest income of Rs 673.82 crore and fee income of Rs 172.58 crores, and certain incorrect manual entries posted in the "other assets" and "other liabilities" of previous year amounting to Rs 595 crore.
Time of India
15-05-2025
- Business
- Time of India
IndusInd reveals Rs 674 crore error in microfinance books, flags 'other' asset lapse
IndusInd Bank on Thursday stated that a whistleblower had complained regarding the " other assets " and "other liabilities" entries in the book of the bank, following which the audit committee of the Hinduja-promoted lender reviewed these transactions. The bank stated that unsubstantiated balances aggregating to ₹595 crore in "other assets" accounts of the bank were set off against corresponding balances appearing in "other liabilities" accounts in January 2025. The bank also disclosed that with regards to the microfinance loan book, a cumulative amount of ₹674 crore was incorrectly recorded as interest over three quarters of FY24-25, which was fully reversed as on January 10, 2025. The disclosures were made by the bank in response to an ET report on Thursday that a whistleblower letter had accelerated disclosures made by the bank on forex discrepancies in the forex derivatives portfolio on March 10 and the micro finance portfolio on April 22. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. ET had reported that the letter was delivered to the bank's senior management a few days before RBI approved a limited, one-year extension for chief executive Sumant Kathpalia, on March 6. The lender highlighted anomalies in its derivatives portfolio on March 10 to the stock exchanges, causing a 27% erosion in the stock's value overnight. On Thursday, the bank stated that on April 22, 2025, it disclosed that "the bank's internal audit department (IAD) was conducting a review of the bank's MFI business to examine certain concerns which had been brought to the bank's attention." These disclosures by IndusInd, too, were made by the bank after ET first reported on April 22 edition that the bank had engaged an audit firm to investigate a ₹600-crore discrepancy in recognising interest income in the lender's microfinance portfolio. On Thursday, the bank stated, "pursuant to receipt of a whistleblower complaint , the IAD was asked by the audit committee of the board to review transactions recorded in "other assets" and "other liabilities".
