 "Indusind Bank")
Shares of IndusInd Bank slipped over 3 per cent on Thurday amid reports that its internal audit department is examining yet another accounting irregularity.
IndusInd Bank's stock fell as much as 3.01 per cent during the day to ₹757.8 per share. The stock trimmed some losses to trade 0.88 per cent lower at ₹774 apiece, compared to a 0.36 per cent decline in Nifty50 as of 10:15 AM.
Shares of the company have fallen over 10 per cent from their recent peak of ₹863, which it hit earlier this month. In March, the stock nosedived after noting the discrepancies in its derivatives portfolio. The stock has fallen 19 per cent this year, compared to a 3.5 per cent advance in the benchmark Nifty50.
IndusInd Bank's new accounting irregularities
According to a report by the Economic Times, the lender's internal audit department is currently examining a series of past accounting reversals. These were first raised in a whistleblower letter to the Reserve Bank of India (RBI) and the bank's board of directors.
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These are different from what the Hinduja Group-controlled private lender has declared so far, the report said. They involve ‘other assets’ and ‘other liabilities’ accounting entries that figure under operating expenses in the bank’s financial statements. It is unclear which years the matter pertains to, the report added.
Business Standard could not independently verify the veracity of the report, and the lender is yet to respond to the latest article. ALSO READ: Jubilant FoodWorks drops 3% on mixed Q4 results; ₹1.20 dividend declared
IndusInd Bank CEO exit
Late last month, Managing Director and Chief Executive Officer, Sumant Kathpalia, tendered his resignation, citing “moral responsibility” after derivatives lapses that resulted in a loss of nearly ₹2,000 crore. Before that, Arun Khurana, deputy CEO of the lender, had also resigned.
Derivatives discrepancies
The resignation comes after the external agency — PwC — appointed to validate the findings of its internal review identified discrepancies in its derivatives portfolio and estimated a negative impact of ₹1,979 crore as of June 30, 2024. Based on the external agency’s report, the bank said that the discrepancies would have an adverse post-tax impact of 2.27 per cent on its net worth as of December 2024. In the October-December quarter (Q3) of 2024-25 (FY25), the bank’s net worth was ₹65,102 crore.
Previously, on March 10, the bank had disclosed to the exchanges that in an internal review, it had found discrepancies in its derivatives portfolio, which would have an adverse impact of 2.35 per cent on its net worth as of December 2024, or roughly ₹1,530 crore.
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