IndusInd stock plunges on derivatives lapse

Shares of IndusInd Bank plunged 27.2% on the bourses on Tuesday, a day after the private sector lender flagged discrepancies in its derivatives portfolio, sending panicked investors scrambling to sell counters.

- Shayan Ghosh, Ram Sahgal, Anshika Kayastha & Varun Sood

MUMBAI/BENGALURU: Earlier, CEO Sumant Kathpalia got a one-year extension from the banking regulator instead of three, and he pointed to the derivatives issue as probable cause for not being given a three-year term.

On Monday, the Hinduja group-promoted bank said it has appointed an external agency to investigate the derivatives lapse while keeping the Reserve Bank of India (RBI) in the loop. The bank had said in its December quarter presentation that its treasury has the "best-in-class risk management system".

Ashok Hinduja, chairman of IndusInd International Holdings, told Mint over phone, "Let me provide some confidence as far as the promoter is concerned, and I have told the market and investors that our full support is there, like it always has been in the past."