‘Factually incorrect’: IndusInd Bank refutes media report on CEO, deputy stepping down after accounting lapses

IndusInd Bank, who is under the radar for possible accounting lapses, has rejected a media report saying RBI has urged the lender’s CEO Sumant Kathpalia and deputy CEO Arun Khurana to step down.

“We would like to clarify that the recent media reports regarding the tenure of the Bank’s CEO and Deputy CEO are factually incorrect. The Bank strongly denies the claims made in these articles. The information circulating is entirely inaccurate and does not reflect the true situation,” said the bank’s spokesperson.

Previously, Reuters quoting four sources reported that Reserve Bank of India has urged the CEO of IndusInd Bank and his deputy to step down after significant accounting lapses as soon as replacements are found and the central bank has approved them.

Recently, IndusInd Bank has appointed a professional firm to conduct investigation for identifying the root cause of accounting discrepancies relating to its derivatives portfolio. As per an estimate, Rs 2,100 crore discrepancy in accounting may impact 2.35 per cent of the Bank’s net worth.

The bank on March 10, had disclosed the ongoing review by an external agency, of certain discrepancies identified by the lender, in its account balances relating to its derivatives portfolio.

Earlier this week, IIHL chairman Ashok Hinduja said IndusInd Bank has not sought any fresh capital from its promoters even though it suffered a huge loss in its net worth following an accounting discrepancy.IIHL, the investment arm of Hinduja Group, has recently got RBI’s in-principle approval to raise its stake in IndusInd Bank from 16 per cent to 26 per cent.According to Hinduja, IndusInd International Holdings Ltd (IIHL) — the Mauritius-based promoters of the private sector lender — has committed to infuse capital into the bank in case there is a requirement.