Indond Bank Accounting Crisis under control, is resolved soon: RBI Sanjay Malhotra

RBI Sanjay Malhotra said on Thursday that accounting issues at Indusind Bank are closely monitored and expected to be resolved soon. “We must stabilize the Indusind Bank case very soon. We will continue to monitor it. The bank has taken sufficient steps to improve accounting problems, and in general, it works well,” Malhotra told a press conference after the MPC rate was reduced.

His remarks come amid the scrutiny due to the contradictions that have been marked in the classification of loans to the bank and savings practices. Although RBI has not issued any official directive yet, the central bank guarantee indicates that the corrective measures taken by the bank shows positive results.

After the comments, Indusind Ltd Bank. She witnessed its shares rising by 5 % on Friday, June 6. At 2 pm, the shares were trading at 824.25 rupees, with a rate of 2.63 %.

During his talk about the total banking system, the Rbi Malhotra ruler said the situation is strong. Malhotra reassured that the recent events at Indend Bank, although they are related, should not be the cause of excessive anxiety as long as they are isolated accidents. He pointed out that the bank has implemented the necessary steps to enhance accounting and internal operations, noting that the Indusind Bank is working well.

According to Deputy Governor of RBI Swaminathan J, the contradictions highlighted by the organizer were resolved in the Q4 results, after RBI directions. A criminal review was made to ensure accountability, as Swaminathan said, “Every crisis provides valuable lessons to enhance our supervisory framework.”

Swaminathan mentioned that the lender was keeping the regulatory authority in knowledge of planning the caliphate, which confirms that the process is proceeding as planned. He expressed optimism that the situation will be resolved immediately.

In March of this year, Indusind Bank reported 2000 rupees’ versions of his wealth due to issues in derivative accounting. Since then, more accounting violations have been discovered, which led to the start of the appointment process for a new command team, including the new CEO.

The Securities and Stock Exchange Council in India recently issued an order prohibiting five major administration employees (KMPS), including former administrative director, CEO Sumant Kathpala, and former CEO Aaron Khourana, to engage in securities. Sebi is prohibited from making any buying, selling or dealing in securities, directly and indirectly, until further notice. In addition, it imposes restrictions on any deposits or withdrawals from its bank accounts without prior approval from the organizer.

According to the temporary order for Sebi, bank officials who sold shares were found knowing about accounting contradictions, which formed unpublished information. This has led officials to avoid the losses of 19.78 rupees, especially from CEO Sumant Kathpala and his deputy Aaron Khourana.

The preliminary results of the regulator revealed that the senior management was aware of the accounting contradictions early in December 2023 and recognized internally the great influence. This information was cited from internal emails.