India's Banks Undergo Credibility Test Amid IndusInd Bank Scandal

India's banking system is under the credibility test in the wake of IndusInd Bank's discovery of a ₹1,580 crore gap in its derivatives portfolio. This caused a 27% stock crash, wiping off more than ₹18,000 crore of investors' wealth. Analysts cite governance and internal control concerns with various brokerages downgrading the stock. The episode highlights systemic problems with India's financial institutions, where faith is the key to investor confidence. Promoters and regulators are trying to instill confidence among stakeholders, but the process of revival will be a function of tackling these governance issues in an effective manner.

 

Source: CNBC-TV18, Moneycontrol, Economic Times