The Reserve Bank of India (RBI) urged the CEO of Industrie Bank and its assistant to resign after significant accounting failures as soon as the replacements are found, according to a Reuters report.
The RBI clearly indicated that he had lost confidence in senior executives, but that he wanted an ordered transition to avoid disturbing depositors. The central bank also clearly indicated that it wanted the candidates to come from outside the industrial, according to the report.
Business today could not verify the development independently.
Industry Bank rejected complaints as incorrect factually. “We would like to point out that recent media reports concerning the mandate of the CEO and assistant CEO of the bank are in fact incorrect. The bank firmly denies the allegations formulated in these items. Circulating information is entirely inaccurate and does not reflect the real situation,” the bank said in a statement.
The lender is developed after his recent disclosure of a substantial accounting gap resulting from an internal examination of Forex derived transactions. The survey revealed an accounting discrepancy totaling RS 1,577 crore (post-tax), representing approximately 2.35% of the bank’s net value in December 2024.
In 2023, the Reserve Bank of India (RBI) published new guidelines for banking investment portfolios, which entered into force on April 1, 2024. Previously, banks were authorized to carry out internal exchanges on their management of assets and cash offices, exchanging a treasury flow for another.
If these exchanges were interrupted early, all the profits made were taken into account, while the losses were not recorded. However, Industry Bank has poorly calculated the cover costs associated with exchange transactions in the past five to seven years. A recent internal examination revealed this surveillance, which led to an expected impact on the net value of the bank equivalent to 2.35% or approximately 2,100 freeze.
Recently, RBI had declared that the Industry Bank was well accumulated and that the bank’s financial situation remains satisfactory. The bank had maintained a comfortable capital adequacy ratio of 16.46% and a disposition coverage ratio of 70.20%, according to the financial results evaluated by the bank auditors for the closed quarter on December 31, 2024.
Meanwhile, Ashok Hinduja, President of Indreat International Holdings LTD (IIHL), said that if necessary, promoters are willing to inject capital to Industry Bank. However, at present, the level of capital adequacy of the bank is satisfactory and there is no immediate requirement for additional funds. IIHL, which has a 15% stake in Industry Bank, was not approached by the bank for additional capital.
