(Reuters) -Shares of India’s IndusInd Bank rose as much as 5.3% on Friday after a deputy governor at the country’s central bank said “things should settle down soon” at the lender, which has grappled with accounting lapses.
IndusInd said in March that years of incorrect accounting of internal derivative trades led to a $230 million hit to its accounts for the financial year ended March 31.
Separately, an internal audit of its microfinance business found that around $80 million was incorrectly recorded as interest over three quarters, which it reversed in January.
Its CEO, Sumant Kathpalia, and deputy, Arun Khurana, stepped down in April.
“Whatever that was supposed to play out (with IndusInd Bank) over the last 3 months is more or less on track,” a Reserve Bank of India deputy governor, Swaminathan Janakiraman, said on Friday.
Swaminathan said that things should settle down at the lender soon and be back to normal.
The stock, which is set for its best day in nearly two months, was among the top gainers on the Nifty Bank index, which is up 1.5% propped up in part by cuts of the key lending rate and cash reserve ratio earlier in the day.
“I think the bank has taken enough number of steps to improve their accounting and other practices and on the whole I think the bank is doing well,” said RBI governor Sanjay Malhotra.
IndusInd Bank is down 6% since first disclosing the derivatives accounting lapse, underperforming the bank index which has risen 17% in that period.
(Reporting by Nishit Navin in Bengaluru; Editing by Nivedita Bhattacharjee)
