IndusInd Bank Faces Rs 2,100 Crore Accounting Discrepancy Amid Share Plummet

IndusInd Bank is grappling with a Rs 2,100 crore accounting discrepancy, resulting in a 27% drop in shares. CEO Sumant Kathpalia assured coverage through reserves. The issue arose from accumulated discrepancies in the derivatives portfolio. RBI extended Kathpalia’s tenure by one year amid concerns.

IndusInd Bank confronted a Rs 2,100 crore accounting discrepancy on Tuesday, revealing sufficient reserves and capital to mitigate the fallout. However, this reassurance from management failed to stop the plummeting of its shares, which tumbled more than 27% on the stock market.

CEO and Managing Director Sumant Kathpalia explained the accounting irregularity surfaced in late 2023, with preliminary notification to the RBI made recently. The final figures are anticipated after an external agency completes its review in April. The issue stems from accumulated discrepancies in the bank's derivatives portfolio.

Investors remain alarmed as shares hit a one-year low, despite Kathpalia's assurances of financial health. Meanwhile, the RBI granted him a one-year extension, rather than the requested three, hinting at potential unease with his leadership during this critical period for the bank.

(With inputs from agencies.)