**IndusInd Bank Takes Steps to Improve Accounting Practices, RBI Reports Positive Outlook**
The Reserve Bank of India (RBI) announced on Friday that IndusInd Bank has made significant progress in enhancing its accounting practices. RBI Governor Sanjay Malhotra expressed confidence in the bank’s overall performance, which led to a more than 5% increase in its share price. This statement comes nearly three months after the bank revealed issues within its derivatives portfolio, resulting in a dramatic 27% drop in its stock value. Since that disclosure, IndusInd Bank has experienced the departure of several top executives and has been under scrutiny from both the RBI and the Securities and Exchange Board of India (Sebi).
Malhotra noted the resignation of the Managing Director and CEO, who stepped down to take moral responsibility for the situation. “I thought that should be good enough,” he remarked during a post-policy conference. Following this announcement, IndusInd Bank’s shares reached an intraday high of ₹845.9 on the Bombay Stock Exchange, reflecting a 5.3% increase, although the stock remains 8.6% lower than its closing price on March 10, the day the derivatives issues were acknowledged. In contrast, the broader BSE Bankex index has risen by 15% during the same timeframe.
When questioned about accountability at the board level, Malhotra responded, “The MD & CEO, who is also a member of the board—if he has taken responsibility, that is at the board level itself.” The bank is currently undergoing a management transition, following the exit of Deputy Chief Executive Arun Khurana just two days after a report by Grant Thornton highlighted the derivatives lapses, and the resignation of CEO Sumant Kathpalia before a successor was appointed.
On May 21, IndusInd Bank Chairman Sunil Mehta stated that the board was not aware of the discrepancies and acted promptly once they were discovered. However, a Sebi investigation revealed that the bank had engaged KPMG to review the issues as early as January 29, 2024, well before the matter was disclosed to stock exchanges on March 10, 2025.
Malhotra emphasized that the RBI typically refrains from commenting on individual banks but reassured that the banking system remains robust. He acknowledged that while such episodes may occur, they should not cause excessive concern as long as they are infrequent and contained.
Deputy Governor Swaminathan J confirmed that IndusInd Bank has complied with all RBI requirements, which included ensuring accurate accounting of discrepancies through internal and external audits, reflected in the March quarter results. Additionally, a forensic audit was mandated to hold accountable those responsible, with a focus on ensuring that no customers faced losses or inconveniences. Swaminathan noted that each crisis provides the RBI with valuable lessons, enhancing its supervisory capabilities for the future.
**FAQ**
**What steps is IndusInd Bank taking to address its accounting issues?**
IndusInd Bank is implementing improved accounting practices, conducting internal and external audits, and undergoing a forensic audit to ensure accountability and prevent customer losses.
