The Morning Brief The Curious Case of IndusInd Bank
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Mar 28, 2025 Saloni Shukla, an accomplished banking analyst from ET, dives into the escalating crisis at IndusInd Bank. She unpacks alarming accounting discrepancies threatening massive losses, and the resulting regulatory investigations. Discussions on governance failures and leadership turmoil reveal the bank's precarious position. Who's accountable? Can trust be restored? Saloni also highlights the strategic shifts the bank must undertake to regain stability amidst scrutiny and market uncertainties.
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IndusInd Bank's Growth Story
- IndusInd Bank, founded by S.P. Hinduja in 1994, grew steadily but unremarkably until 2008.
- Ramesh Sobti joined as CEO in 2008, leading a period of aggressive, tech-driven growth and assertive bets.
RBI's Intervention
- Current CEO Sumanth Katpalya's tenure extension was shortened by the RBI, raising concerns.
- Katpalya admitted the RBI's dissatisfaction with his leadership, a first for a banking CEO.
Shift to NRI Deposits
- Under Katpalya, IndusInd shifted focus to NRI deposits, increasing them from under 5% to around 15% of liabilities.
- This shift aimed to secure stable, long-term funding and cater to high-net-worth clients.