Mumbai, March 12 | IndusInd Bank shares faced a major sell-off in the market following reports of discrepancies in its derivatives portfolio uncovered during an audit in March. However, the stock has shown signs of recovery today. As of 12:20 PM, IndusInd Bank shares were trading at ₹682 on the NSE, up by ₹25.80 (3.93%). The day’s high stood at ₹694.70, with a trading volume of approximately 81,270,409 shares.
Audit Reveals ₹1,500 Crore Derivatives Loss
Recent audits indicate a potential ₹1,500 crore loss due to issues in forex hedging. It was found that the bank had underreported hedging costs in past forex transactions, leading to inflated profit figures in previous quarters. This revelation could impact the bank’s net worth by ₹1,600-2,000 crore.
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Is IndusInd Bank Safe for Investors?
According to CNBC-Awaaz Managing Editor Anuj Singhal, the safety of IndusInd Bank depends on whether one is a depositor or a shareholder. Depositors’ money remains safe as the RBI has never allowed depositors’ funds to be at risk. However, shareholders are advised to exit the stock. He compared this situation to past banking crises involving Global Trust Bank and Yes Bank. Reports suggest that the RBI insisted on this audit, as the bank had been delaying provisioning.
Is IndusInd Bank an Isolated Case?
Singhal also pointed out a report in The Economic Times, indicating that the RBI might instruct all banks to review their derivatives exposure. While most major private banks follow strict accounting standards, the IndusInd Bank case highlights risks within the banking sector. Long-term wealth creation in banking is limited to only a handful of institutions.
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