Private sector lender IndusInd Bank has witnessed volatile trade on the bourses since beginning of this month. There are couple of reason behind huge gyrations in the share price.
First, the change in guard at the top is seen as leading to uncertainty.
Romesh Sobti, the long standing MD & CEO of the Bank has retired today on turning 70 years old.
The Reserve Bank of India (RBl), regulator of lenders, norm does not allow the position to be held by anyone beyond 70 years.
Sobti was at the helm of affairs of the bank since taking over the position of MD and CEO on February 1, 2008.
Meanwhile, the RBI has approved the appointment of Sumant Kathpalia as the MD & CEO for 3 years, with effect from 24 March 2020.
Sumant Kathpalia currently heads the bank’s consumer banking business.
The private sector lenders are currently facing deep mistrust among customers and rumour mongering keeps simmering in markets, which has caused severe beating to various lenders post YES Bank debacle.
Private sector lenders suffered on the bourses following the YES Bank fiasco and the ensuing fear among depositors seem to have affected several private banks, with large customers withdrawing deposits.
IndusInd Bank’s deposit base has eroded by nearly 2% as some state governments shifted deposits from the private lender.
However, many private-sector lenders have time and again issued statements in a bid to quell market sentiments and restore faith among customers.
IndusInd Bank has reiterated that it is financially strong, well-capitalised, profitable, and a growing entity with a strong governance.
As on 31 December, IndusInd Bank’s deposit base stood at Rs 2.16 Lakh crore, up 23% from the same period last year. The bank’s total business—sum of advances and deposits—stood at Rs 4.24 lakh crore, up 22% from Q3FY19.
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