Hinduja goes into damage-control mode as fraud rocks IndusInd Bank
New Delhi: Ashok P Hinduja, Chairman, IndusInd International Holdings Limited (IIHL), which is the promoter of IndusInd Bank, went into damage-control mode Thursday following the announcement of the fraud in the bank that has plunged the lender into a Rs 2, 236 crore loss for the January-March quarter.
“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 said in a statement.
The RBI has launched investigations into the accounting discrepancies at IndusInd Bank.
The Securities and Exchange Board of India (SEBI) is also investigating possible violations in the IndusInd Bank case, following the bank’s disclosure of suspected fraud and concerns over insider trading, SEBI Chairman Tuhin Kanta Pandey said Thursday.
IndusInd Bank said Wednesday that its Board suspects a fraud involving certain employees, who played a significant role in the lender’s accounting and financial reporting, and has directed all necessary actions to be taken under applicable laws, including reporting the matter to regulatory authorities and investigative agencies.
IndusInd Bank’s internal audit department found May 20 that Rs 172.58 crore had been incorrectly recorded as fee income in the Microfinance (MFI) business over three quarters ending the December quarter, which has since been reversed in the fourth quarter of FY25.
The disclosure follows the abrupt sacking of the IndusInd Bank CEO last month after widespread irregularities were discovered in its foreign exchange derivatives and microfinance portfolio.
Meanwhile Hinduja said, “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.”
He also expressed “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, he said
“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 added.
IANS
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