IndusInd Promoter Pledges Capital Support Amid Accounting Woes, Quarterly Loss

IndusInd International Holdings Ltd., the promoter of IndusInd Bank, on Thursday reaffirmed its commitment to support the lender with equity if required, following a turbulent quarter marred by accounting discrepancies.

“Though the capital adequacy of the bank is quite healthy for business growth, should any further equity be required, IndusInd International… remains committed to supporting the bank, as it has done over the past 30 years,” Ashok P. Hinduja, chairman of the promoter group, said in a statement.

His comments came a day after IndusInd Bank reported a net loss of ₹22.36 billion for the March quarter, compared with a profit of ₹23.47 billion a year earlier—marking its first quarterly loss since the January–March quarter of 2010–11.

The bank has come under intense scrutiny since March after disclosing irregularities in its derivatives accounting, microfinance book, and misclassification of balances in “other assets and liabilities” as interest income instead of other income.

Chairman Sunil Mehta admitted on Wednesday that the lapses pointed to “inadequate emphasis on accounting analysis and violation of governance norms, internal controls, and reporting mechanisms.” He said the board is working with management to effect a cultural shift focused on stronger ethics and governance.

Hinduja said he had full confidence in the board’s efforts to clean up the bank, adding that the prompt actions taken will help restore transparency and trust.

“The coordinated efforts of current management under the board’s guidance have ensured the bank’s business remains healthy, with robust capital adequacy,” he noted.

He also praised the Reserve Bank of India for its “orderly and constructive” handling of the situation.