Stock to watch: IndusInd Bank shares to be in focus on Monday; Here’s why

Stock to watch: Shares of IndusInd Bank will be in focus during the next market session on Monday, March 24. The leading private lender denied media reports on Friday that the Reserve Bank of India (RBI) has urged the bank's CEO, Sumant Kathpalia and deputy CEO, Arun Khurana, to step down from their respective positions after the accounting lapses were disclosed.

In an official statement, IndusInd Bank categorised the reports as ‘factually inaccurate.’ “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," said IndusInd Bank's official spokesperson in a statement late Friday, March 21.

Also Read: IndusInd Bank refutes ‘factually incorrect’ media reports claiming CEO, deputy to exit after accounting lapses

On Friday, news agency Reuters reported that the RBI had 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.

IndusInd Bank Share Price Trend

Shares of IndusInd Bank tumbled 33 per cent in March and 29 per cent year-to-date (YTD). Shares have plunged 53 per cent in the last six months. IndusInd Bank is India's fifth-largest private lender. On Friday, shares of IndusInd Bank settled 0.29 per cent higher at ₹685.75 apiece on the BSE.

Also Read: RBI directs IndusInd Bank to complete remedial action in Q4: ‘Well capitalised, depositors need not worry’

Soon after disclosing the accounting lapses earlier this month, IndusInd Bank's share price had crashed by over 27 per cent in one day. The bank's stock has nosedived as much as 38 per cent market cap in six sessions.

IndusInd Bank accounting lapse

On March 10, the bank disclosed its derivatives portfolio was overvalued by 2.35 per cent - after non-compliant internal trades. It noted discrepancies in its derivatives portfolio, which could likely result in a one-time loss of ₹2,000 crore in the March quarter.

The discrepancies were unearthed during the review of its currency derivatives portfolio. The bank, headed by Sumant Kathpalia, has appointed external investigators. His deputy, Arun Khurana, also heads the global markets division, which includes the derivatives portfolio.

Also Read: IndusInd Bank share price extends crash; banking stock sheds 38% market cap in six straight sessions

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

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