(Reuters) -IndusInd Bank said on Thursday it has appointed an independent firm to conduct an investigation into discrepancies found by the bank related to its derivatives portfolio.
The Mumbai-based lender reported earlier this month that it had discovered an accounting discrepancy in the way it booked currency derivatives, stretching back at least six years, with an estimated impact of $175 million.
The independent firm, which the bank did not name, will identify the root cause of the discrepancies, assess the correctness of the accounting treatment of the derivative contracts with regard to current accounting standards, and identify lapses, IndusInd said in an exchange filing.
Shares of IndusInd Bank were down about 30% this month, hit by worries over the issue and after the central bank approved a shorter-than-requested term extension for CEO Sumant Kathpalia, who has been with IndusInd Bank for 17 years.
India’s central bank said on Saturday that IndusInd Bank was well capitalised and the financial position of the bank remained “satisfactory”.
(Reporting by Chris Thomas in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli)
