IndusInd Bank denies report claiming bank’s chiefs to exit within months after accounting lapses

The RBI made clear that it had lost confidence in the top executives, but that it wanted an orderly transition to avoid unnerving depositors, the report said citing sources.

IndusInd Bank on March 21 denied media reports that said that bank’s chiefs will exit within months following the accounting lapses.

“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,” IndusInd Bank’s spokesperson said.

Earlier today, Reuters citing sources have reported that the 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.

The RBI made clear that it had lost confidence in the top executives, but that it wanted an orderly transition to avoid unnerving depositors, report said citing sources.

The report added that a second source said the RBI, which only recently approved a one-year extension for Kathpalia, had also made clear that it wanted the candidates to come from outside IndusInd.

While a bank's board makes recommendations for top executive positions, RBI approval is required. The central bank is known to offer informal advice to lenders facing governance or financial concerns that it would prefer an external candidate.

After the discrepancies were disclosed, On March 15, the RBI said IndusInd bank remains "well-capitalised and the financially position remains satisfactory". The statement followed concerns arising from recent developments at the Mumbai-headquartered private lender.

According to the RBI, IndusInd Bank reported a Capital Adequacy Ratio of 16.46 percent and a Provision Coverage Ratio of 70.20 percent at the end of December quarter.

The bank also maintained a Liquidity Coverage Ratio (LCR) of 113 percent as of March 9, exceeding the regulatory requirement of 100 percent.

Last week, IndusInd Bank said it noted some discrepancies in its derivatives portfolio, which could result in a one-time loss of Rs 2,000 crore in the March quarter.

The discrepancies were unearthed during a review of its currency derivatives portfolio.