IndusInd Bank Crisis: A Timeline From Derivatives Mismatch To Insider Trading Woes

Over the past two months, IndusInd Bank has found itself in the spotlight for all the wrong reasons. What began as a seemingly isolated derivatives trading discrepancy has snowballed into a multi-layered crisis involving leadership resignations, forensic investigations, and a growing trust deficit.

Here's a chronological breakdown of key events since the saga began:

March 10 – IndusInd Bank disclosed discrepancies in its derivatives portfolio, estimating a potential financial impact of 2.35%—approximately Rs 1,900–2,000 crore. The bank said it had initiated a review via an external agency, later revealed to be PwC.

March 15 – Amid rising depositor anxiety, the Reserve Bank of India stepped in with a public assurance that the issue was internal and under control. The central bank clarified there was no systemic risk and that depositors need not worry.

March 20 – The bank’s board escalated the matter by commissioning a deeper investigation, this time appointing Grant Thornton to identify the root cause and fix accountability.

April 22 – The issue widened. IndusInd Bank revealed fresh concerns related to its microfinance accounting. An internal audit, supported by EY, was launched to investigate the new irregularities.

April 27 – Findings of the Grant Thornton probe were released. The report confirmed a financial impact of Rs 1,960 crore, consistent with earlier estimates. It also identified individuals responsible for the trading mishap, and the board said appropriate disciplinary action had been taken.

April 28 – Deputy CEO Arun Khurana, who oversaw the treasury division at the time of the derivatives trading missteps, resigned, citing accountability.

April 29 – MD and CEO Sumant Kathpalia followed suit, stepping down in response to the crisis under his watch, marking a significant leadership reset.

April 30 – The board appointed two executives to manage operations until a new CEO was found, suggesting an interim arrangement as the bank worked through the fallout.

May 9 – New concerns emerged. Based on Grant Thornton’s report, the board disclosed it was investigating insider trading allegations. This admission followed a media report.

May 15 – Two further accounting issues came to light. The bank admitted to Rs 674 crore in incorrectly recognised microfinance income and Rs 595 crore of unsubstantiated balances in ‘other assets’. While these gaps were reportedly corrected in January, their delayed disclosure raised further concerns about transparency.