The RBI said, “The Reserve Bank would like to state that the bank is well-capitalised and the financial position of the bank remains satisfactory.”
“Basis the disclosures available in public domain, the bank has already engaged an external audit team to comprehensively review their current systems, and to assess and account for the actual impact expeditiously,” the RBI added.
“As such, there is no need for depositors to react to the speculative reports at this juncture. The bank’s financial health remains stable and is being monitored closely by Reserve Bank,” the RBI said.
The bank undertook internal trades which had low liquidity and were on swap basis where 3-5 yr yen deposits were to be swapped for 8-10 yr dollars for a multilateral.
These trades were hedged where the hedges were marked to market but the internal swaps were on cost accounting basis and not mark to marketed. This resulted in discrepancies.
The bank has also appointed an external agency to independently review and validate the internal findings. The review is likely to be completed by fourth quarter itself.
Earlier this month, the IndusInd Bank’s CEO Sumant Kathpalia, received RBI approval for tenure extension by 1 year vs expectation for 3 years. On 18-Jan-2025, the CFO had tendered his resignation to pursue other professional opportunities.
