- RBI asks IndusInd Bank CEO and deputy to resign due to accounting mistakes.
- Bank found a Rs 1,577 crore error in forex transactions, affecting its net worth.
- IndusInd denies the claims, says its financial health remains strong.
The Reserve Bank of India (RBI) has reportedly asked the CEO and deputy CEO of IndusInd Bank to step down after discovering major accounting errors. According to Reuters, the RBI wants new leaders from outside the bank to take over once replacements are ready. This move aims to keep things calm for customers, even though the RBI no longer trusts the current top executives. However, IndusInd Bank has called these reports “factually incorrect” and denied any leadership changes.
The trouble started when an internal review uncovered a Rs 1,577 crore (after-tax) mistake in the bank’s foreign exchange dealings. This error, linked to misjudged hedging costs over five to seven years, equals about 2.35% of the bank’s total net worth. The issue came to light after new RBI rules in 2023 changed how banks handle investment portfolios, exposing losses that were previously ignored. Despite this, IndusInd says it’s financially solid, with a strong capital adequacy ratio of 16.46%.
The RBI has also stated that IndusInd Bank is well-capitalized and in satisfactory shape. The bank’s chairman, Ashok Hinduja, added that the promoters, who own a 15% stake through IndusInd International Holdings Ltd, are ready to add more funds if needed. For now, though, the bank says it doesn’t require extra cash. The situation remains under watch as the bank works to address the accounting lapses and restore confidence
