IndusInd Bank Sinks 30% Before Recovery On CEO's Retirement

On Tuesday, shares of IndusInd Bank fell as much as 30 percent to Rs 235.60 on NSE as its managing director and chief executive Romesh Sobti's retirement became effective. However, the stock soon recovered the losses it made in the morning session.

On Monday, the private lender informed of the retirement of Sobti in a regulatory filing and said that he shall demit the Office of MD & CEO of the bank on 23 March, in line with the tenure approved by the RBI.

RBI has placed 70 years as the age limit for the retirement of MDs at banks, making Sobti's retirement a regulatory requirement.

In February, the bank has announced the elevation of its consumer banking head Sumant Kathpalia as the new MD and CEO with effect from March 2020.

Losses on Tuesday, pile on to the existing pressure faced by the bank from investors' panic over coronavirus spread and Yes Bank crisis.

After the RBI announced the placement of Yes Bank under a moratorium on 5 March, mid-sized private banks like IndusInd have significantly lost in valuation due to rumours of financial instability. Share value of IndusInd Bank has fallen 78 percent from Rs 1,075 on 6 March to its low of Rs 235.60 on 24 March.

The private lender also confirmed through a press release that there was a 2 percent reduction in its deposit base after the Yes Bank crisis.