Business

IndusInd Bank fiasco: How greedy market ignored the red flags for years

Concerns were raised about IndusInd Bank’s alleged lending and risk-management practices, as well as its disclosures. There were variances in its gross and net NPAs for FY16. This was followed by another year of misreporting in FY17, with a larger divergence suggesting a lack of respect for regulatory rules and authority.

Reserve Bank of India governor Sanjay Malhotra, at the post-monetary policy briefing on April 9, maintained that India’s banking sector was robust and described the controversies involving IndusInd Bank’s accounting discrepancies as an isolated episode — not a systemic failure. It is true that, in the scheme of “regulatory dialectics” as proposed by Edward Kane, regulators are, by design, bound to lag behind the regulated. This is due to the.