Kolkata: Ashok P Hinduja, chairman, IndusInd International Holdings has expressed his unwavering support to IndusInd Bank against the backdrop of recent accounting discrepancy with an estimated impact of Rs 1,577 crore on the bank. In a statement Hinduja has also mentioned “swift actions to address the discrepancies, and expressed confidence that the situation would “lead to higher standards of transparency and governance, leading to rebuilding trust in the bank”.
The discrepancy reported by IndusInd Bank shocked the Indian banking sector, where IndusInd Bank is an emerging force in the private sector banking theatre and triggered concerns over corporate governance and financial stability. On March 10, the bank management reported a financial misstatement centering derivative transactions. According to reports, the impact was quantified at Rs 1,577 crore, or 2.35% of the bank’s net worth. Investors reacted with alacrity and the next day the stock dived 27% and the scrip was put in the Futures & Options ban list.
Confidence in the board
“I express my continued, unequivocal trust in the Chairman & Board of Directors of the Bank for their appropriate, swift actions in order to address discrepancies and attendant areas of concern… This would lead to higher standards of transparency and governance, leading to rebuilding trust in the Bank. The coordinated efforts of current management under the guidance and monitoring of the Board and other stakeholders have ensured that the bank’s business remains healthy, with robust capital adequacy. The continued confidence of the customers in the Bank shows their trust in the institution, which has always been upheld. This shall be a new dawn with a sanitised slate to regain the position the Bank enjoyed for many decades,” Hinduja said in a statement.
What RBI had said
After the development, Reserve Bank of India (RBI) stepped in to assuage nervous customers and said that IndusInd Bank remained ‘well-capitalised’. Its financial position was also ‘satisfactory.’ “The Reserve Bank would like to state that the bank is well-capitalised and the financial position of the bank remains satisfactory,” the banking regulator wrote in a statement.
“The stance of the Regulator in addressing the issues in a very orderly manner with suitable guidance, as demonstrated by them in past for the banking sector, is commendable. Though the Capital Adequacy of the Bank is quite healthy, for business growth, should any further equity be required, IIHL, as the promoter of IBL, remains committed to supporting the Bank, as it has done over the past 30 years,” Hinduja added.
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Ashok Hinduja not only said that he had full confidence in the board to deal with the situation and emerge stronger but also mentioned that he is ready to chip in with additional equity if the situation warranted it. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
