Reserve Bank Governor Sanjay Malhotra on Friday said fraud-hit IndusInd Bank is "doing well" now, and added that the resignation of MD and CEO Sumant Kathpalia should be seen as a "good enough" step from an accountability perspective.
The RBI also said the bank has complied with all the regulatory asks over the turbulent period.
"The MD and CEO of the bank resigned, owning moral responsibilities. So, I thought that should be good enough. Do you expect that all the board members should resign)... I think the MD and CEO, who is also a member of the board... has taken responsibility, that is at the board level itself," Malhotra said.
The governor made it clear that RBI will not shy away from taking any action against the bank, and the law will take its own course if there are any criminalities in the matter.
IndusInd Bank has been witnessing challenges for the last few quarters, starting with its microloan exposures and then conceding accounting lapses. It recorded the worst quarterly performance in its history by posting a Rs 2,329 crore loss in Q4FY25, as it took the brunt of all the accounting lapses and oversights.
"I think the bank has taken enough number of steps to improve their accounting and other practices, and on the whole, I think it is doing well," Malhotra told reporters at the RBI headquarters here.
Stressing that the banking system is very robust, Malhotra said while such episodes happen, they should not bother us too much till they are fewer in number.
Deputy Governor Swaminathan J said that IndusInd Bank, now under a transitory management, has delivered on all the regulatory asks over the past few months.
The Hindujas-promoted private sector lender took on board all the accounting discrepancies, held a forensic audit to fix responsibility, ensured that none of the customers or the broader banking system was impacted, and is also working on a succession plan, the DG said.
Swaminathan said there are a lot of learnings for the RBI from the crisis and added that it will look for red flags in the future so that it is able to anticipate a crisis much earlier.
The IndusInd Bank scrip gained 2.50 percent to close at Rs 823.30 apiece on the BSE, as against a 0.92 percent gain on the benchmark following the RBI comments.