IndusInd Bank, one of India’s prominent private-sector lenders, recently faced a significant crisis due to its aggressive profit-driven strategies and lax controls. The bank reportedly deviated from established derivative accounting practices, leading to a $175 million shortfall in its balance sheet. This discrepancy, which equated to an entire quarter’s profits, came to light after the rupee’s sharp depreciation.
The Reserve Bank of India (RBI) has since intervened, reportedly asking the bank’s CEO and deputy to step down, though IndusInd has denied this claim. The crisis highlights the risks associated with complex derivative transactions and raises concerns about the robustness of board-level controls in financial institutions.
